Correlation Between Prudential Health and Putnam Global
Can any of the company-specific risk be diversified away by investing in both Prudential Health 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 Prudential Health and Putnam Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Health Sciences and Putnam Global Health, you can compare the effects of market volatilities on Prudential Health 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 Prudential Health with a short position of Putnam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Health and Putnam Global.
Diversification Opportunities for Prudential Health and Putnam Global
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Prudential and Putnam is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Health Sciences and Putnam Global Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Global Health and Prudential Health 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 Prudential Health Sciences 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 Health has no effect on the direction of Prudential Health i.e., Prudential Health and Putnam Global go up and down completely randomly.
Pair Corralation between Prudential Health and Putnam Global
Assuming the 90 days horizon Prudential Health Sciences is expected to generate 1.18 times more return on investment than Putnam Global. However, Prudential Health is 1.18 times more volatile than Putnam Global Health. It trades about 0.15 of its potential returns per unit of risk. Putnam Global Health is currently generating about 0.1 per unit of risk. If you would invest 3,049 in Prudential Health Sciences on May 28, 2025 and sell it today you would earn a total of 290.00 from holding Prudential Health Sciences or generate 9.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Health Sciences vs. Putnam Global Health
Performance |
| Timeline |
| Prudential Health |
| Putnam Global Health |
Prudential Health and Putnam Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Health and Putnam Global
The main advantage of trading using opposite Prudential Health and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Health 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.| Prudential Health vs. Vanguard Small Cap Value | Prudential Health vs. Northern Small Cap | Prudential Health vs. Pace Smallmedium Value | Prudential Health vs. Valic Company I |
| Putnam Global vs. Putnam Equity Income | Putnam Global vs. Putnam Tax Exempt | Putnam Global vs. Putnam Floating Rate | Putnam Global vs. Putnam High Yield |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |