Correlation Between George Putnam and Glg Intl

Can any of the company-specific risk be diversified away by investing in both George Putnam and Glg Intl 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 George Putnam and Glg Intl into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between George Putnam Balanced and Glg Intl Small, you can compare the effects of market volatilities on George Putnam and Glg Intl 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 George Putnam with a short position of Glg Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of George Putnam and Glg Intl.

Diversification Opportunities for George Putnam and Glg Intl

0.74

Correlation Coefficient

George Putnam  Glg Intl

Poor diversification

The 3 months correlation between George and Glg is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding George Putnam Balanced and Glg Intl Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glg Intl Small and George Putnam 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 George Putnam Balanced are associated (or correlated) with Glg Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glg Intl Small has no effect on the direction of George Putnam i.e., George Putnam and Glg Intl go up and down completely randomly.

Pair Corralation between George Putnam and Glg Intl

Assuming the 90 days horizon George Putnam Balanced is expected to under-perform the Glg Intl. But the mutual fund apears to be less risky and, when comparing its historical volatility, George Putnam Balanced is 1.77 times less risky than Glg Intl. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Glg Intl Small is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  8,354  in Glg Intl Small on December 19, 2024 and sell it today you would lose (173.00) from holding Glg Intl Small or give up 2.07% of portfolio value over 90 days.

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

George Putnam Balanced  vs.  Glg Intl Small

George Putnam Balanced

Risk-Adjusted Performance

Very Weak

Over the last 90 days George Putnam Balanced has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking indicators, George Putnam is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Glg Intl Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Glg Intl Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Glg Intl is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with George Putnam and Glg Intl

The main advantage of trading using opposite George Putnam and Glg Intl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if George Putnam position performs unexpectedly, Glg Intl 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 Glg Intl will offset losses from the drop in Glg Intl's long position.

The idea behind George Putnam Balanced and Glg Intl Small 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.