Correlation Between Putnam Global and Pender Real

Can any of the company-specific risk be diversified away by investing in both Putnam Global and Pender Real at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Putnam Global and Pender Real into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Putnam Global Equity and Pender Real Estate, you can compare the effects of market volatilities on Putnam Global and Pender Real and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Putnam Global with a short position of Pender Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Global and Pender Real.

Diversification Opportunities for Putnam Global and Pender Real

0.45

Correlation Coefficient

Putnam Global  Pender Real

Very weak diversification

The 3 months correlation between Putnam and Pender is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Global Equity and Pender Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pender Real Estate and Putnam Global is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Putnam Global Equity are associated (or correlated) with Pender Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pender Real Estate has no effect on the direction of Putnam Global i.e., Putnam Global and Pender Real go up and down completely randomly.

Pair Corralation between Putnam Global and Pender Real

Assuming the 90 days horizon Putnam Global Equity is expected to generate 17.09 times more return on investment than Pender Real. However, Putnam Global is 17.09 times more volatile than Pender Real Estate. It trades about 0.18 of its potential returns per unit of risk. Pender Real Estate is currently generating about 0.7 per unit of risk. If you would invest  1,457  in Putnam Global Equity on December 20, 2024 and sell it today you would earn a total of  131.00  from holding Putnam Global Equity or generate 8.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Putnam Global Equity  vs.  Pender Real Estate

Putnam Global Equity

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Putnam Global Equity are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Putnam Global may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pender Real Estate

Risk-Adjusted Performance

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in Pender Real Estate are ranked lower than 55 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Pender Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Putnam Global and Pender Real

The main advantage of trading using opposite Putnam Global and Pender Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Global position performs unexpectedly, Pender Real can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Pender Real will offset losses from the drop in Pender Real's long position.

The idea behind Putnam Global Equity and Pender Real Estate pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.