Correlation Between Putnam Global and Guidepath Income

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

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

Diversification Opportunities for Putnam Global and Guidepath Income

0.94

Correlation Coefficient

Putnam Global  Guidepath Income

Almost no diversification

The 3 months correlation between Putnam and Guidepath is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Global Financials and Guidepath Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidepath Income and Putnam 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 Putnam Global Financials are associated (or correlated) with Guidepath Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidepath Income has no effect on the direction of Putnam Global i.e., Putnam Global and Guidepath Income go up and down completely randomly.

Pair Corralation between Putnam Global and Guidepath Income

Assuming the 90 days horizon Putnam Global Financials is expected to generate 1.67 times more return on investment than Guidepath Income. However, Putnam Global is 1.67 times more volatile than Guidepath Income. It trades about 0.21 of its potential returns per unit of risk. Guidepath Income is currently generating about 0.2 per unit of risk. If you would invest  1,085  in Putnam Global Financials on July 28, 2025 and sell it today you would earn a total of  54.00  from holding Putnam Global Financials or generate 4.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Putnam Global Financials  vs.  Guidepath Income

Putnam Global Financials

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Putnam Global Financials are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Putnam Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Guidepath Income

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Guidepath Income are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Guidepath Income is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Putnam Global and Guidepath Income

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

The idea behind Putnam Global Financials and Guidepath Income 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.