Correlation Between Simplify Exchange and Putnam ETF

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

By analyzing existing cross correlation between Simplify Exchange Traded and Putnam ETF Trust, you can compare the effects of market volatilities on Simplify Exchange and Putnam ETF 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 Simplify Exchange with a short position of Putnam ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplify Exchange and Putnam ETF.

Diversification Opportunities for Simplify Exchange and Putnam ETF

0.79

Correlation Coefficient

Simplify Exchange  Putnam ETF

Poor diversification

The 3 months correlation between Simplify and Putnam is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Simplify Exchange Traded and Putnam ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam ETF Trust and Simplify Exchange 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 Simplify Exchange Traded are associated (or correlated) with Putnam ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam ETF Trust has no effect on the direction of Simplify Exchange i.e., Simplify Exchange and Putnam ETF go up and down completely randomly.

Pair Corralation between Simplify Exchange and Putnam ETF

Considering the 90-day investment horizon Simplify Exchange is expected to generate 1.24 times less return on investment than Putnam ETF. In addition to that, Simplify Exchange is 1.06 times more volatile than Putnam ETF Trust. It trades about 0.13 of its total potential returns per unit of risk. Putnam ETF Trust is currently generating about 0.18 per unit of volatility. If you would invest  4,747  in Putnam ETF Trust on May 14, 2025 and sell it today you would earn a total of  146.90  from holding Putnam ETF Trust or generate 3.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Simplify Exchange Traded  vs.  Putnam ETF Trust

Simplify Exchange Traded

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Simplify Exchange Traded are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental indicators, Simplify Exchange is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Putnam ETF Trust

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Putnam ETF Trust are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Putnam ETF is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Simplify Exchange and Putnam ETF

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

The idea behind Simplify Exchange Traded and Putnam ETF Trust 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.