Correlation Between Putnam Diversified and Commodities Strategy
Can any of the company-specific risk be diversified away by investing in both Putnam Diversified and Commodities Strategy 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 Commodities Strategy 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 Commodities Strategy Fund, you can compare the effects of market volatilities on Putnam Diversified and Commodities Strategy 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 Commodities Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Diversified and Commodities Strategy.
Diversification Opportunities for Putnam Diversified and Commodities Strategy
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Putnam and Commodities is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Diversified Income and Commodities Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commodities Strategy 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 Commodities Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commodities Strategy has no effect on the direction of Putnam Diversified i.e., Putnam Diversified and Commodities Strategy go up and down completely randomly.
Pair Corralation between Putnam Diversified and Commodities Strategy
Assuming the 90 days horizon Putnam Diversified Income is expected to generate 0.17 times more return on investment than Commodities Strategy. However, Putnam Diversified Income is 5.93 times less risky than Commodities Strategy. It trades about 0.1 of its potential returns per unit of risk. Commodities Strategy Fund is currently generating about -0.01 per unit of risk. If you would invest 502.00 in Putnam Diversified Income on September 1, 2025 and sell it today you would earn a total of 5.00 from holding Putnam Diversified Income or generate 1.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Diversified Income vs. Commodities Strategy Fund
Performance |
| Timeline |
| Putnam Diversified Income |
| Commodities Strategy |
Putnam Diversified and Commodities Strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Diversified and Commodities Strategy
The main advantage of trading using opposite Putnam Diversified and Commodities Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Diversified position performs unexpectedly, Commodities Strategy 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 Commodities Strategy will offset losses from the drop in Commodities Strategy's long position.| Putnam Diversified vs. Sterling Capital Behavioral | Putnam Diversified vs. Profunds Large Cap Growth | Putnam Diversified vs. Qs Large Cap | Putnam Diversified vs. Prudential Qma Large Cap |
| Commodities Strategy vs. Basic Materials Fund | Commodities Strategy vs. Basic Materials Fund | Commodities Strategy vs. Banking Fund Class | Commodities Strategy vs. Basic Materials Fund |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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