Correlation Between Putnam Diversified and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Putnam Diversified and Emerging Markets 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 Diversified and Emerging Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Diversified Income and Emerging Markets Portfolio, you can compare the effects of market volatilities on Putnam Diversified and Emerging Markets 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 Diversified with a short position of Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Diversified and Emerging Markets.
Diversification Opportunities for Putnam Diversified and Emerging Markets
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Putnam and Emerging is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Diversified Income and Emerging Markets Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Por and Putnam Diversified 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 Diversified Income are associated (or correlated) with Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets Por has no effect on the direction of Putnam Diversified i.e., Putnam Diversified and Emerging Markets go up and down completely randomly.
Pair Corralation between Putnam Diversified and Emerging Markets
Assuming the 90 days horizon Putnam Diversified is expected to generate 4.0 times less return on investment than Emerging Markets. But when comparing it to its historical volatility, Putnam Diversified Income is 4.07 times less risky than Emerging Markets. It trades about 0.29 of its potential returns per unit of risk. Emerging Markets Portfolio is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 2,105 in Emerging Markets Portfolio on April 23, 2025 and sell it today you would earn a total of 288.00 from holding Emerging Markets Portfolio or generate 13.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Diversified Income vs. Emerging Markets Portfolio
Performance |
| Timeline |
| Putnam Diversified Income |
| Emerging Markets Por |
Putnam Diversified and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Diversified and Emerging Markets
The main advantage of trading using opposite Putnam Diversified and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Diversified position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| Putnam Diversified vs. Putnam Equity Income | Putnam Diversified vs. Putnam Tax Exempt | Putnam Diversified vs. Putnam Floating Rate | Putnam Diversified vs. Putnam High Yield |
| Emerging Markets vs. Ab Bond Inflation | Emerging Markets vs. Bbh Intermediate Municipal | Emerging Markets vs. Siit High Yield | Emerging Markets vs. Versatile Bond Portfolio |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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