Correlation Between Global Opportunity and Putnam Growth
Can any of the company-specific risk be diversified away by investing in both Global Opportunity 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 Global Opportunity and Putnam Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Opportunity Portfolio and Putnam Growth Opportunities, you can compare the effects of market volatilities on Global Opportunity 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 Global Opportunity with a short position of Putnam Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Opportunity and Putnam Growth.
Diversification Opportunities for Global Opportunity and Putnam Growth
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Global and Putnam is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Global Opportunity Portfolio 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 Global Opportunity 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 Global Opportunity Portfolio 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 Global Opportunity i.e., Global Opportunity and Putnam Growth go up and down completely randomly.
Pair Corralation between Global Opportunity and Putnam Growth
Assuming the 90 days horizon Global Opportunity Portfolio is expected to generate 0.72 times more return on investment than Putnam Growth. However, Global Opportunity Portfolio is 1.39 times less risky than Putnam Growth. It trades about 0.25 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 3,528 in Global Opportunity Portfolio on August 27, 2024 and sell it today you would earn a total of 156.00 from holding Global Opportunity Portfolio or generate 4.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Opportunity Portfolio vs. Putnam Growth Opportunities
Performance |
| Timeline |
| Global Opportunity |
| Putnam Growth Opport |
Global Opportunity and Putnam Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Opportunity and Putnam Growth
The main advantage of trading using opposite Global Opportunity and Putnam Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Opportunity 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.| Global Opportunity vs. Morgan Stanley Multi | Global Opportunity vs. Growth Portfolio Class | Global Opportunity vs. Virtus Kar Small Cap | Global Opportunity vs. Blackrock Science Technology |
| 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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