Correlation Between Dunham Dynamic and Putnam Global

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Can any of the company-specific risk be diversified away by investing in both Dunham Dynamic 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 Dunham Dynamic and Putnam Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Dynamic Macro and Putnam Global Technology, you can compare the effects of market volatilities on Dunham Dynamic 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 Dunham Dynamic with a short position of Putnam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Dynamic and Putnam Global.

Diversification Opportunities for Dunham Dynamic and Putnam Global

0.87
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Dunham and Putnam is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Dynamic Macro and Putnam Global Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Global Technology and Dunham Dynamic 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 Dunham Dynamic Macro 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 Technology has no effect on the direction of Dunham Dynamic i.e., Dunham Dynamic and Putnam Global go up and down completely randomly.

Pair Corralation between Dunham Dynamic and Putnam Global

Assuming the 90 days horizon Dunham Dynamic is expected to generate 9.26 times less return on investment than Putnam Global. But when comparing it to its historical volatility, Dunham Dynamic Macro is 6.15 times less risky than Putnam Global. It trades about 0.18 of its potential returns per unit of risk. Putnam Global Technology is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  6,695  in Putnam Global Technology on May 6, 2025 and sell it today you would earn a total of  1,371  from holding Putnam Global Technology or generate 20.48% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Dunham Dynamic Macro  vs.  Putnam Global Technology

 Performance 
       Timeline  
Dunham Dynamic Macro 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Dunham Dynamic Macro are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Dunham Dynamic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Putnam Global Technology 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Putnam Global Technology are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Putnam Global showed solid returns over the last few months and may actually be approaching a breakup point.

Dunham Dynamic and Putnam Global Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Dunham Dynamic and Putnam Global

The main advantage of trading using opposite Dunham Dynamic and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Dynamic 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.
The idea behind Dunham Dynamic Macro and Putnam Global Technology 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

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