Correlation Between American Funds and Putnam Growth
Can any of the company-specific risk be diversified away by investing in both American Funds and Putnam Growth 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 Putnam Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds The and Putnam Growth Opportunities, you can compare the effects of market volatilities on American Funds and Putnam Growth 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 Putnam Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Putnam Growth.
Diversification Opportunities for American Funds and Putnam Growth
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between American and Putnam is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding American Funds The and Putnam Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Growth Opport 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 The are associated (or correlated) with Putnam Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Growth Opport has no effect on the direction of American Funds i.e., American Funds and Putnam Growth go up and down completely randomly.
Pair Corralation between American Funds and Putnam Growth
Assuming the 90 days horizon American Funds The is expected to generate 0.88 times more return on investment than Putnam Growth. However, American Funds The is 1.14 times less risky than Putnam Growth. It trades about 0.17 of its potential returns per unit of risk. Putnam Growth Opportunities is currently generating about 0.11 per unit of risk. If you would invest 7,869 in American Funds The on August 28, 2024 and sell it today you would earn a total of 286.00 from holding American Funds The or generate 3.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds The vs. Putnam Growth Opportunities
Performance |
| Timeline |
| American Funds |
| Putnam Growth Opport |
American Funds and Putnam Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Putnam Growth
The main advantage of trading using opposite American Funds and Putnam Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Putnam Growth 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 Growth will offset losses from the drop in Putnam Growth's long position.| American Funds vs. Fidelity Advisor Diversified | American Funds vs. Delaware Limited Term Diversified | American Funds vs. Conservative Balanced Allocation | American Funds vs. Pgim Conservative Retirement |
| Putnam Growth vs. George Putnam Fund | Putnam Growth vs. Putnam Dynamic Asset | Putnam Growth vs. Aquagold International | Putnam Growth vs. Morningstar Unconstrained Allocation |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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