Correlation Between Blackrock Fundamental and Putnam Money

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

By analyzing existing cross correlation between Blackrock Fundamental Growth and Putnam Money Market, you can compare the effects of market volatilities on Blackrock Fundamental and Putnam Money 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 Blackrock Fundamental with a short position of Putnam Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Fundamental and Putnam Money.

Diversification Opportunities for Blackrock Fundamental and Putnam Money

0.0

Correlation Coefficient

Blackrock Fundamental  Putnam Money

Pay attention - limited upside

The 3 months correlation between Blackrock and Putnam is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Fundamental Growth and Putnam Money Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Money Market and Blackrock Fundamental 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 Blackrock Fundamental Growth are associated (or correlated) with Putnam Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Money Market has no effect on the direction of Blackrock Fundamental i.e., Blackrock Fundamental and Putnam Money go up and down completely randomly.

Pair Corralation between Blackrock Fundamental and Putnam Money

Assuming the 90 days horizon Blackrock Fundamental Growth is expected to generate 1.44 times more return on investment than Putnam Money. However, Blackrock Fundamental is 1.44 times more volatile than Putnam Money Market. It trades about 0.1 of its potential returns per unit of risk. Putnam Money Market is currently generating about 0.03 per unit of risk. If you would invest  2,529  in Blackrock Fundamental Growth on September 12, 2024 and sell it today you would earn a total of  2,022  from holding Blackrock Fundamental Growth or generate 79.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.4%
Values	Daily Returns

Blackrock Fundamental Growth  vs.  Putnam Money Market

Blackrock Fundamental

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Fundamental Growth are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Blackrock Fundamental may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Putnam Money Market

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Blackrock Fundamental and Putnam Money

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

The idea behind Blackrock Fundamental Growth and Putnam Money Market 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..