Correlation Between Putnam Ultra and Polaris Global

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Can any of the company-specific risk be diversified away by investing in both Putnam Ultra and Polaris Global 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 Ultra and Polaris Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Ultra Short and Polaris Global Value, you can compare the effects of market volatilities on Putnam Ultra and Polaris Global 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 Ultra with a short position of Polaris Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Ultra and Polaris Global.

Diversification Opportunities for Putnam Ultra and Polaris Global

-0.31
  Correlation Coefficient

Very good diversification

The 3 months correlation between Putnam and Polaris is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Ultra Short and Polaris Global Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polaris Global Value and Putnam Ultra 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 Ultra Short are associated (or correlated) with Polaris Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polaris Global Value has no effect on the direction of Putnam Ultra i.e., Putnam Ultra and Polaris Global go up and down completely randomly.

Pair Corralation between Putnam Ultra and Polaris Global

Assuming the 90 days horizon Putnam Ultra Short is expected to generate 0.13 times more return on investment than Polaris Global. However, Putnam Ultra Short is 7.78 times less risky than Polaris Global. It trades about 0.19 of its potential returns per unit of risk. Polaris Global Value is currently generating about 0.02 per unit of risk. If you would invest  971.00  in Putnam Ultra Short on October 2, 2024 and sell it today you would earn a total of  40.00  from holding Putnam Ultra Short or generate 4.12% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.56%
ValuesDaily Returns

Putnam Ultra Short  vs.  Polaris Global Value

 Performance 
       Timeline  
Putnam Ultra Short 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Putnam Ultra Short are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Putnam Ultra is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Polaris Global Value 

Risk-Adjusted Performance

0 of 100

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

Putnam Ultra and Polaris Global Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Putnam Ultra and Polaris Global

The main advantage of trading using opposite Putnam Ultra and Polaris Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Ultra position performs unexpectedly, Polaris Global 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 Polaris Global will offset losses from the drop in Polaris Global's long position.
The idea behind Putnam Ultra Short and Polaris Global 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.
Check out your portfolio center.
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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