Correlation Between American Funds and George Putnam
Can any of the company-specific risk be diversified away by investing in both American Funds 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 American Funds and George Putnam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds American and George Putnam Fund, you can compare the effects of market volatilities on American Funds 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 American Funds with a short position of George Putnam. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and George Putnam.
Diversification Opportunities for American Funds and George Putnam
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and GEORGE is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding American Funds American and George Putnam Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on George Putnam and American Funds 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 American Funds American 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 American Funds i.e., American Funds and George Putnam go up and down completely randomly.
Pair Corralation between American Funds and George Putnam
Assuming the 90 days horizon American Funds American is expected to generate 1.12 times more return on investment than George Putnam. However, American Funds is 1.12 times more volatile than George Putnam Fund. It trades about 0.17 of its potential returns per unit of risk. George Putnam Fund is currently generating about 0.14 per unit of risk. If you would invest 3,501 in American Funds American on November 18, 2024 and sell it today you would earn a total of 68.00 from holding American Funds American or generate 1.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds American vs. George Putnam Fund
Performance |
| Timeline |
| American Funds American |
| George Putnam |
American Funds and George Putnam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and George Putnam
The main advantage of trading using opposite American Funds and George Putnam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds 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.| American Funds vs. Pimco Energy Tactical | American Funds vs. Jennison Natural Resources | American Funds vs. Alpsalerian Energy Infrastructure | American Funds vs. Short Oil Gas |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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