Correlation Between Putnam Global and Financial Services
Can any of the company-specific risk be diversified away by investing in both Putnam Global and Financial Services 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 Global and Financial Services into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Global Financials and Financial Services Fund, you can compare the effects of market volatilities on Putnam Global and Financial Services 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 Global with a short position of Financial Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Global and Financial Services.
Diversification Opportunities for Putnam Global and Financial Services
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Putnam and Financial is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Global Financials and Financial Services Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financial Services and Putnam Global 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 Global Financials are associated (or correlated) with Financial Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financial Services has no effect on the direction of Putnam Global i.e., Putnam Global and Financial Services go up and down completely randomly.
Pair Corralation between Putnam Global and Financial Services
Assuming the 90 days horizon Putnam Global Financials is expected to generate 0.42 times more return on investment than Financial Services. However, Putnam Global Financials is 2.38 times less risky than Financial Services. It trades about 0.07 of its potential returns per unit of risk. Financial Services Fund is currently generating about -0.08 per unit of risk. If you would invest 1,099 in Putnam Global Financials on August 27, 2025 and sell it today you would earn a total of 18.00 from holding Putnam Global Financials or generate 1.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Global Financials vs. Financial Services Fund
Performance |
| Timeline |
| Putnam Global Financials |
| Financial Services |
Putnam Global and Financial Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Global and Financial Services
The main advantage of trading using opposite Putnam Global and Financial Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Global position performs unexpectedly, Financial Services 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 Financial Services will offset losses from the drop in Financial Services' long position.| Putnam Global vs. Federated Mdt Small | Putnam Global vs. Qs Small Capitalization | Putnam Global vs. Touchstone Small Cap | Putnam Global vs. Omni Small Cap Value |
| Financial Services vs. Siit Emerging Markets | Financial Services vs. Aqr Tm Emerging | Financial Services vs. Martin Currie Emerging | Financial Services vs. Franklin Emerging Market |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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