Correlation Between Putnam International and Polen Global
Can any of the company-specific risk be diversified away by investing in both Putnam International and Polen 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 International and Polen Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam International Value and Polen Global Growth, you can compare the effects of market volatilities on Putnam International and Polen 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 International with a short position of Polen Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam International and Polen Global.
Diversification Opportunities for Putnam International and Polen Global
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Putnam and Polen is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Putnam International Value and Polen Global Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polen Global Growth and Putnam International 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 International Value are associated (or correlated) with Polen Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polen Global Growth has no effect on the direction of Putnam International i.e., Putnam International and Polen Global go up and down completely randomly.
Pair Corralation between Putnam International and Polen Global
If you would invest 2,618 in Polen Global Growth on September 7, 2024 and sell it today you would earn a total of 144.00 from holding Polen Global Growth or generate 5.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Putnam International Value vs. Polen Global Growth
Performance |
Timeline |
Putnam International |
Polen Global Growth |
Putnam International and Polen Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Putnam International and Polen Global
The main advantage of trading using opposite Putnam International and Polen Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam International position performs unexpectedly, Polen 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 Polen Global will offset losses from the drop in Polen Global's long position.The idea behind Putnam International Value and Polen Global Growth 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.
Polen Global vs. Putnam Multi Cap Growth | Polen Global vs. Polen Growth Fund | Polen Global vs. Putnam Global Equity | Polen Global vs. Putnam International Equity |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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