Correlation Between Blackrock Moderate and George Putnam
Can any of the company-specific risk be diversified away by investing in both Blackrock Moderate 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 Blackrock Moderate and George Putnam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Moderate Prepared and George Putnam Fund, you can compare the effects of market volatilities on Blackrock Moderate 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 Blackrock Moderate with a short position of George Putnam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Moderate and George Putnam.
Diversification Opportunities for Blackrock Moderate and George Putnam
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Blackrock and George is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Moderate Prepared and George Putnam Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on George Putnam and Blackrock Moderate 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 Blackrock Moderate Prepared 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 Blackrock Moderate i.e., Blackrock Moderate and George Putnam go up and down completely randomly.
Pair Corralation between Blackrock Moderate and George Putnam
Assuming the 90 days horizon Blackrock Moderate is expected to generate 1.48 times less return on investment than George Putnam. In addition to that, Blackrock Moderate is 1.02 times more volatile than George Putnam Fund. It trades about 0.07 of its total potential returns per unit of risk. George Putnam Fund is currently generating about 0.11 per unit of volatility. If you would invest 2,090 in George Putnam Fund on September 2, 2024 and sell it today you would earn a total of 543.00 from holding George Putnam Fund or generate 25.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.46% |
| Values | Daily Returns |
Blackrock Moderate Prepared vs. George Putnam Fund
Performance |
| Timeline |
| Blackrock Moderate |
| George Putnam |
Blackrock Moderate and George Putnam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Moderate and George Putnam
The main advantage of trading using opposite Blackrock Moderate and George Putnam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Moderate 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.| Blackrock Moderate vs. Blackrock California Municipal | Blackrock Moderate vs. Blackrock Balanced Capital | Blackrock Moderate vs. Blackrock Eurofund Class | Blackrock Moderate vs. Blackrock Funds |
| George Putnam vs. Putnam Equity Income | George Putnam vs. Putnam Tax Exempt | George Putnam vs. Putnam Floating Rate | George Putnam vs. Putnam High Yield |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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