Correlation Between Balanced Fund and Putnam Global
Can any of the company-specific risk be diversified away by investing in both Balanced Fund and Putnam 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 Balanced Fund and Putnam Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balanced Fund Retail and Putnam Global Financials, you can compare the effects of market volatilities on Balanced Fund and Putnam 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 Balanced Fund with a short position of Putnam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Fund and Putnam Global.
Diversification Opportunities for Balanced Fund and Putnam Global
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Balanced and Putnam is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Fund Retail and Putnam Global Financials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Global Financials and Balanced Fund 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 Balanced Fund Retail are associated (or correlated) with Putnam Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Global Financials has no effect on the direction of Balanced Fund i.e., Balanced Fund and Putnam Global go up and down completely randomly.
Pair Corralation between Balanced Fund and Putnam Global
Assuming the 90 days horizon Balanced Fund Retail is expected to generate 1.23 times more return on investment than Putnam Global. However, Balanced Fund is 1.23 times more volatile than Putnam Global Financials. It trades about 0.27 of its potential returns per unit of risk. Putnam Global Financials is currently generating about 0.25 per unit of risk. If you would invest 1,197 in Balanced Fund Retail on April 24, 2025 and sell it today you would earn a total of 96.00 from holding Balanced Fund Retail or generate 8.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Balanced Fund Retail vs. Putnam Global Financials
Performance |
| Timeline |
| Balanced Fund Retail |
| Putnam Global Financials |
Balanced Fund and Putnam Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balanced Fund and Putnam Global
The main advantage of trading using opposite Balanced Fund and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balanced Fund position performs unexpectedly, Putnam 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 Putnam Global will offset losses from the drop in Putnam Global's long position.| Balanced Fund vs. Quantex Fund Retail | Balanced Fund vs. Infrastructure Fund Retail | Balanced Fund vs. Dynamic Growth Fund | Balanced Fund vs. Spectrum Fund Retail |
| Putnam Global vs. Ultra Short Term Fixed | Putnam Global vs. Blackrock Global Longshort | Putnam Global vs. Oakhurst Short Duration | Putnam Global vs. Nuveen Short Term |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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