Correlation Between Red Oak and Putnam Global

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

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

Diversification Opportunities for Red Oak and Putnam Global

0.99

Correlation Coefficient

Red Oak  Putnam Global

No risk reduction

The 3 months correlation between Red and Putnam is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Red Oak 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 Red Oak 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 Red Oak 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 Red Oak i.e., Red Oak and Putnam Global go up and down completely randomly.

Pair Corralation between Red Oak and Putnam Global

Assuming the 90 days horizon Red Oak Technology is expected to generate 0.85 times more return on investment than Putnam Global. However, Red Oak Technology is 1.17 times less risky than Putnam Global. It trades about 0.32 of its potential returns per unit of risk. Putnam Global Technology is currently generating about 0.26 per unit of risk. If you would invest  4,366  in Red Oak Technology on May 6, 2025 and sell it today you would earn a total of  922.00  from holding Red Oak Technology or generate 21.12% return on investment over 90 days.

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

Red Oak Technology  vs.  Putnam Global Technology

Red Oak Technology

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Red Oak 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, Red Oak 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 Red Oak and Putnam Global

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

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.