Correlation Between Goldman Sachs and Putnam Global

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

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

Diversification Opportunities for Goldman Sachs and Putnam Global

0.98

Correlation Coefficient

Goldman Sachs  Putnam Global

Almost no diversification

The 3 months correlation between Goldman and Putnam is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Technology 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 Goldman Sachs 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 Goldman Sachs Technology 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 Goldman Sachs i.e., Goldman Sachs and Putnam Global go up and down completely randomly.

Pair Corralation between Goldman Sachs and Putnam Global

Assuming the 90 days horizon Goldman Sachs is expected to generate 1.0 times less return on investment than Putnam Global. But when comparing it to its historical volatility, Goldman Sachs Technology is 1.18 times less risky than Putnam Global. It trades about 0.31 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 Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Goldman Sachs Technology  vs.  Putnam Global Technology

Goldman Sachs Technology

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Technology are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Goldman Sachs showed solid returns over the last few months and may actually be approaching a breakup point.

Putnam Global Technology

Risk-Adjusted Performance

Solid

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.

Pair Trading with Goldman Sachs and Putnam Global

The main advantage of trading using opposite Goldman Sachs and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs 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 Goldman Sachs Technology 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.

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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.