Correlation Between Princeton Adaptive and Putnam Asia

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

By analyzing existing cross correlation between Princeton Adaptive Premium and Putnam Asia Pacific, you can compare the effects of market volatilities on Princeton Adaptive and Putnam Asia 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 Princeton Adaptive with a short position of Putnam Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Princeton Adaptive and Putnam Asia.

Diversification Opportunities for Princeton Adaptive and Putnam Asia

1.0

Correlation Coefficient

Princeton Adaptive  Putnam Asia

No risk reduction

The 3 months correlation between Princeton and Putnam is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Princeton Adaptive Premium and Putnam Asia Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Asia Pacific and Princeton Adaptive 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 Princeton Adaptive Premium are associated (or correlated) with Putnam Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Asia Pacific has no effect on the direction of Princeton Adaptive i.e., Princeton Adaptive and Putnam Asia go up and down completely randomly.

Pair Corralation between Princeton Adaptive and Putnam Asia

Assuming the 90 days horizon Princeton Adaptive Premium is expected to generate 0.91 times more return on investment than Putnam Asia. However, Princeton Adaptive Premium is 1.09 times less risky than Putnam Asia. It trades about 0.58 of its potential returns per unit of risk. Putnam Asia Pacific is currently generating about 0.46 per unit of risk. If you would invest  1,038  in Princeton Adaptive Premium on September 8, 2025 and sell it today you would earn a total of  21.00  from holding Princeton Adaptive Premium or generate 2.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.46%
Values	Daily Returns

Princeton Adaptive Premium  vs.  Putnam Asia Pacific

Princeton Adaptive

Risk-Adjusted Performance

Prime

Compared to the overall equity markets, risk-adjusted returns on investments in Princeton Adaptive Premium are ranked lower than 46 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Princeton Adaptive is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Putnam Asia Pacific

Risk-Adjusted Performance

High

Compared to the overall equity markets, risk-adjusted returns on investments in Putnam Asia Pacific are ranked lower than 36 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Putnam Asia is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Princeton Adaptive and Putnam Asia

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

The idea behind Princeton Adaptive Premium and Putnam Asia Pacific 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.