Correlation Between Apollo Global and Putnam Managed

Can any of the company-specific risk be diversified away by investing in both Apollo Global and Putnam Managed 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 Apollo Global and Putnam Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Apollo Global Management and Putnam Managed Municipal, you can compare the effects of market volatilities on Apollo Global and Putnam Managed 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 Apollo Global with a short position of Putnam Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Global and Putnam Managed.

Diversification Opportunities for Apollo Global and Putnam Managed

-0.36

Correlation Coefficient

Apollo Global  Putnam Managed

Very good diversification

The 3 months correlation between Apollo and Putnam is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Global Management and Putnam Managed Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Managed Municipal and Apollo 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 Apollo Global Management are associated (or correlated) with Putnam Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Managed Municipal has no effect on the direction of Apollo Global i.e., Apollo Global and Putnam Managed go up and down completely randomly.

Pair Corralation between Apollo Global and Putnam Managed

Considering the 90-day investment horizon Apollo Global Management is expected to generate 3.88 times more return on investment than Putnam Managed. However, Apollo Global is 3.88 times more volatile than Putnam Managed Municipal. It trades about 0.05 of its potential returns per unit of risk. Putnam Managed Municipal is currently generating about 0.16 per unit of risk. If you would invest  11,757  in Apollo Global Management on June 26, 2024 and sell it today you would earn a total of  766.00  from holding Apollo Global Management or generate 6.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Apollo Global Management  vs.  Putnam Managed Municipal

Apollo Global Management

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Global Management are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Apollo Global may actually be approaching a critical reversion point that can send shares even higher in October 2024.

Putnam Managed Municipal

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Putnam Managed Municipal are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, Putnam Managed is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Apollo Global and Putnam Managed

The main advantage of trading using opposite Apollo Global and Putnam Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Global position performs unexpectedly, Putnam Managed 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 Managed will offset losses from the drop in Putnam Managed's long position.

The idea behind Apollo Global Management and Putnam Managed Municipal pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.