Correlation Between Icon Information and Putnam Growth
Can any of the company-specific risk be diversified away by investing in both Icon Information 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 Icon Information and Putnam Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Icon Information Technology and Putnam Growth Opportunities, you can compare the effects of market volatilities on Icon Information 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 Icon Information with a short position of Putnam Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Information and Putnam Growth.
Diversification Opportunities for Icon Information and Putnam Growth
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Icon and Putnam is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Icon Information Technology 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 Icon Information 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 Icon Information Technology 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 Icon Information i.e., Icon Information and Putnam Growth go up and down completely randomly.
Pair Corralation between Icon Information and Putnam Growth
Assuming the 90 days horizon Icon Information Technology is expected to generate 0.69 times more return on investment than Putnam Growth. However, Icon Information Technology is 1.45 times less risky than Putnam Growth. It trades about 0.15 of its potential returns per unit of risk. Putnam Growth Opportunities is currently generating about 0.01 per unit of risk. If you would invest 1,624 in Icon Information Technology on October 25, 2024 and sell it today you would earn a total of 38.00 from holding Icon Information Technology or generate 2.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Icon Information Technology vs. Putnam Growth Opportunities
Performance |
| Timeline |
| Icon Information Tec |
| Putnam Growth Opport |
Icon Information and Putnam Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Information and Putnam Growth
The main advantage of trading using opposite Icon Information and Putnam Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Information 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.| Icon Information vs. Hartford Moderate Allocation | Icon Information vs. Transamerica Cleartrack Retirement | Icon Information vs. Calvert Moderate Allocation | Icon Information vs. Jp Morgan Smartretirement |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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