Correlation Between Us Global and Putnam International

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

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

Diversification Opportunities for Us Global and Putnam International

0.1

Correlation Coefficient

Us Global  Putnam International

Average diversification

The 3 months correlation between USLUX and Putnam is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Us Global Investors and Putnam International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam International and Us 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 Us Global Investors 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 Us Global i.e., Us Global and Putnam International go up and down completely randomly.

Pair Corralation between Us Global and Putnam International

Assuming the 90 days horizon Us Global Investors is expected to under-perform the Putnam International. In addition to that, Us Global is 1.17 times more volatile than Putnam International Equity. It trades about -0.03 of its total potential returns per unit of risk. Putnam International Equity is currently generating about 0.17 per unit of volatility. If you would invest  2,422  in Putnam International Equity on December 29, 2024 and sell it today you would earn a total of  244.00  from holding Putnam International Equity or generate 10.07% return on investment over 90 days.

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

Us Global Investors  vs.  Putnam International Equity

Us Global Investors

Risk-Adjusted Performance

Very Weak

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

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Putnam International Equity are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Putnam International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Us Global and Putnam International

The main advantage of trading using opposite Us Global and Putnam International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Global 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 Us Global Investors and Putnam International Equity 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.