Correlation Between Putnam Global and Tortoise Energy

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

By analyzing existing cross correlation between Putnam Global Technology and Tortoise Energy Independence, you can compare the effects of market volatilities on Putnam Global and Tortoise Energy 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 Tortoise Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Global and Tortoise Energy.

Diversification Opportunities for Putnam Global and Tortoise Energy

0.37

Correlation Coefficient

Putnam Global  Tortoise Energy

Weak diversification

The 3 months correlation between Putnam and Tortoise is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Global Technology and Tortoise Energy Independence in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tortoise Energy Inde 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 Technology are associated (or correlated) with Tortoise Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tortoise Energy Inde has no effect on the direction of Putnam Global i.e., Putnam Global and Tortoise Energy go up and down completely randomly.

Pair Corralation between Putnam Global and Tortoise Energy

If you would invest  4,072  in Tortoise Energy Independence on December 21, 2024 and sell it today you would earn a total of  0.00  from holding Tortoise Energy Independence or generate 0.0% return on investment over 90 days.

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

Putnam Global Technology  vs.  Tortoise Energy Independence

Putnam Global Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Putnam Global Technology has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Tortoise Energy Inde

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tortoise Energy Independence has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Tortoise Energy 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 Tortoise Energy

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

The idea behind Putnam Global Technology and Tortoise Energy Independence 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.