Correlation Between Performance Trust and Putnam Global

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

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

Diversification Opportunities for Performance Trust and Putnam Global

0.29

Correlation Coefficient

Performance Trust  Putnam Global

Modest diversification

The 3 months correlation between Performance and PUTNAM is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Performance Trust Strategic and Putnam Global Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Global Health and Performance Trust 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 Performance Trust Strategic 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 Health has no effect on the direction of Performance Trust i.e., Performance Trust and Putnam Global go up and down completely randomly.

Pair Corralation between Performance Trust and Putnam Global

Assuming the 90 days horizon Performance Trust is expected to generate 1.83 times less return on investment than Putnam Global. But when comparing it to its historical volatility, Performance Trust Strategic is 2.93 times less risky than Putnam Global. It trades about 0.15 of its potential returns per unit of risk. Putnam Global Health is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  6,023  in Putnam Global Health on May 21, 2025 and sell it today you would earn a total of  292.00  from holding Putnam Global Health or generate 4.85% return on investment over 90 days.

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

Performance Trust Strategic  vs.  Putnam Global Health

Performance Trust

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Performance Trust Strategic are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Performance Trust is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Putnam Global Health

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Putnam Global Health are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Putnam Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Performance Trust and Putnam Global

The main advantage of trading using opposite Performance Trust and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Trust 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 Performance Trust Strategic and Putnam Global Health 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.