Correlation Between Us Government and Putnam Growth
Can any of the company-specific risk be diversified away by investing in both Us Government 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 Us Government and Putnam Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Us Government Plus and Putnam Growth Opportunities, you can compare the effects of market volatilities on Us Government 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 Us Government with a short position of Putnam Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Government and Putnam Growth.
Diversification Opportunities for Us Government and Putnam Growth
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GVPIX and Putnam is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Us Government Plus 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 Us Government 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 Us Government Plus 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 Us Government i.e., Us Government and Putnam Growth go up and down completely randomly.
Pair Corralation between Us Government and Putnam Growth
Assuming the 90 days horizon Us Government Plus is expected to under-perform the Putnam Growth. In addition to that, Us Government is 1.15 times more volatile than Putnam Growth Opportunities. It trades about -0.01 of its total potential returns per unit of risk. Putnam Growth Opportunities is currently generating about 0.11 per unit of volatility. If you would invest 5,134 in Putnam Growth Opportunities on August 31, 2024 and sell it today you would earn a total of 2,663 from holding Putnam Growth Opportunities or generate 51.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Us Government Plus vs. Putnam Growth Opportunities
Performance |
| Timeline |
| Us Government Plus |
| Putnam Growth Opport |
Us Government and Putnam Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Government and Putnam Growth
The main advantage of trading using opposite Us Government and Putnam Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Government 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.| Us Government vs. Us Government Plus | Us Government vs. HUMANA INC | Us Government vs. Aquagold International | Us Government vs. Barloworld Ltd ADR |
| Putnam Growth vs. Dreyfus Government Cash | Putnam Growth vs. Us Government Plus | Putnam Growth vs. Dunham Porategovernment Bond | Putnam Growth vs. Prudential Government Income |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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