Correlation Between NYSE Composite and Putnam Multi
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Putnam Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Putnam Multi Cap Growth, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Putnam Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Putnam Multi.
Diversification Opportunities for NYSE Composite and Putnam Multi
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Putnam is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Putnam Multi go up and down completely randomly.
Pair Corralation between NYSE Composite and Putnam Multi
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.9 times more return on investment than Putnam Multi. However, NYSE Composite is 1.11 times less risky than Putnam Multi. It trades about 0.41 of its potential returns per unit of risk. Putnam Multi Cap Growth is currently generating about 0.34 per unit of risk. If you would invest 1,925,354 in NYSE Composite on September 2, 2024 and sell it today you would earn a total of 101,850 from holding NYSE Composite or generate 5.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Putnam Multi Cap Growth
Performance |
| Timeline |
NYSE Composite and Putnam Multi Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Putnam Multi Cap Growth
Pair trading matchups for Putnam Multi
Pair Trading with NYSE Composite and Putnam Multi
The main advantage of trading using opposite NYSE Composite and Putnam Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
| Putnam Multi vs. Putnam Equity Income | Putnam Multi vs. Putnam Tax Exempt | Putnam Multi vs. Putnam Floating Rate | Putnam Multi vs. Putnam High Yield |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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