Correlation Between Putnam Focused and Global X

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

By analyzing existing cross correlation between Putnam Focused Large and Global X SuperDividend, you can compare the effects of market volatilities on Putnam Focused and Global X 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 Focused with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Focused and Global X.

Diversification Opportunities for Putnam Focused and Global X

0.14

Correlation Coefficient

Putnam Focused  Global X

Average diversification

The 3 months correlation between Putnam and Global is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Focused Large and Global X SuperDividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X SuperDividend and Putnam Focused 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 Focused Large are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X SuperDividend has no effect on the direction of Putnam Focused i.e., Putnam Focused and Global X go up and down completely randomly.

Pair Corralation between Putnam Focused and Global X

Given the investment horizon of 90 days Putnam Focused Large is expected to generate 0.81 times more return on investment than Global X. However, Putnam Focused Large is 1.24 times less risky than Global X. It trades about 0.09 of its potential returns per unit of risk. Global X SuperDividend is currently generating about 0.01 per unit of risk. If you would invest  2,716  in Putnam Focused Large on October 5, 2024 and sell it today you would earn a total of  996.00  from holding Putnam Focused Large or generate 36.67% return on investment over 90 days.

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

Putnam Focused Large  vs.  Global X SuperDividend

Putnam Focused Large

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Putnam Focused Large has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Putnam Focused is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Global X SuperDividend

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global X SuperDividend has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Etf's forward indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the fund sophisticated investors.

Pair Trading with Putnam Focused and Global X

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

The idea behind Putnam Focused Large and Global X SuperDividend 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..