Correlation Between Pnc Fds and Putnam International

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

By analyzing existing cross correlation between Pnc Fds Gr and Putnam International Value, you can compare the effects of market volatilities on Pnc Fds and Putnam International 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 Pnc Fds with a short position of Putnam International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pnc Fds and Putnam International.

Diversification Opportunities for Pnc Fds and Putnam International

-0.55

Correlation Coefficient

Pnc Fds  Putnam International

Excellent diversification

The 3 months correlation between Pnc and Putnam is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Pnc Fds Gr and Putnam International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam International and Pnc Fds 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 Pnc Fds Gr are associated (or correlated) with Putnam International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam International has no effect on the direction of Pnc Fds i.e., Pnc Fds and Putnam International go up and down completely randomly.

Pair Corralation between Pnc Fds and Putnam International

Assuming the 90 days horizon Pnc Fds Gr is expected to under-perform the Putnam International. In addition to that, Pnc Fds is 1.26 times more volatile than Putnam International Value. It trades about -0.06 of its total potential returns per unit of risk. Putnam International Value is currently generating about 0.23 per unit of volatility. If you would invest  1,335  in Putnam International Value on December 28, 2024 and sell it today you would earn a total of  174.00  from holding Putnam International Value or generate 13.03% return on investment over 90 days.

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

Pnc Fds Gr  vs.  Putnam International Value

Pnc Fds Gr

Risk-Adjusted Performance

Very Weak

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

Putnam International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Putnam International Value are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Putnam International showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pnc Fds and Putnam International

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

The idea behind Pnc Fds Gr and Putnam International Value 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.