Correlation Between Income Growth and George Putnam
Can any of the company-specific risk be diversified away by investing in both Income Growth and George Putnam 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 Income Growth and George Putnam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Income Growth Fund and George Putnam Fund, you can compare the effects of market volatilities on Income Growth and George Putnam 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 Income Growth with a short position of George Putnam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Income Growth and George Putnam.
Diversification Opportunities for Income Growth and George Putnam
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Income and George is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Income Growth Fund and George Putnam Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on George Putnam and Income Growth 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 Income Growth Fund are associated (or correlated) with George Putnam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of George Putnam has no effect on the direction of Income Growth i.e., Income Growth and George Putnam go up and down completely randomly.
Pair Corralation between Income Growth and George Putnam
Assuming the 90 days horizon Income Growth Fund is expected to generate 1.54 times more return on investment than George Putnam. However, Income Growth is 1.54 times more volatile than George Putnam Fund. It trades about 0.22 of its potential returns per unit of risk. George Putnam Fund is currently generating about 0.13 per unit of risk. If you would invest 3,738 in Income Growth Fund on August 25, 2024 and sell it today you would earn a total of 151.00 from holding Income Growth Fund or generate 4.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Income Growth Fund vs. George Putnam Fund
Performance |
| Timeline |
| Income Growth |
| George Putnam |
Income Growth and George Putnam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Income Growth and George Putnam
The main advantage of trading using opposite Income Growth and George Putnam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Income Growth position performs unexpectedly, George Putnam 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 George Putnam will offset losses from the drop in George Putnam's long position.| Income Growth vs. Nuveen Winslow Large Cap | Income Growth vs. Fisher Large Cap | Income Growth vs. T Rowe Price | Income Growth vs. Siit Large Cap |
| George Putnam vs. Great West Loomis Sayles | George Putnam vs. Mid Cap Value Profund | George Putnam vs. Ab Discovery Value | George Putnam vs. Amg River Road |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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