Correlation Between Fa 529 and Putnam Multi
Can any of the company-specific risk be diversified away by investing in both Fa 529 and Putnam Multi 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 Fa 529 and Putnam Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fa 529 Aggressive and Putnam Multi Cap Growth, you can compare the effects of market volatilities on Fa 529 and Putnam Multi 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 Fa 529 with a short position of Putnam Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fa 529 and Putnam Multi.
Diversification Opportunities for Fa 529 and Putnam Multi
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FFCGX and Putnam is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Fa 529 Aggressive and Putnam Multi Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Multi Cap and Fa 529 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 Fa 529 Aggressive are associated (or correlated) with Putnam Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Multi Cap has no effect on the direction of Fa 529 i.e., Fa 529 and Putnam Multi go up and down completely randomly.
Pair Corralation between Fa 529 and Putnam Multi
Assuming the 90 days horizon Fa 529 Aggressive is expected to generate 0.24 times more return on investment than Putnam Multi. However, Fa 529 Aggressive is 4.14 times less risky than Putnam Multi. It trades about 0.13 of its potential returns per unit of risk. Putnam Multi Cap Growth is currently generating about -0.16 per unit of risk. If you would invest 4,025 in Fa 529 Aggressive on September 13, 2024 and sell it today you would earn a total of 51.00 from holding Fa 529 Aggressive or generate 1.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fa 529 Aggressive vs. Putnam Multi Cap Growth
Performance |
| Timeline |
| Fa 529 Aggressive |
| Putnam Multi Cap |
Fa 529 and Putnam Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fa 529 and Putnam Multi
The main advantage of trading using opposite Fa 529 and Putnam Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fa 529 position performs unexpectedly, Putnam Multi 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 Multi will offset losses from the drop in Putnam Multi's long position.| Fa 529 vs. Kinetics Market Opportunities | Fa 529 vs. Barings Emerging Markets | Fa 529 vs. Locorr Market Trend | Fa 529 vs. Siit Emerging Markets |
| Putnam Multi vs. Ab Global Bond | Putnam Multi vs. Ab Global Risk | Putnam Multi vs. Investec Global Franchise | Putnam Multi vs. Barings Global Floating |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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