Correlation Between Optimum Small-mid and Putnam Equity
Can any of the company-specific risk be diversified away by investing in both Optimum Small-mid and Putnam Equity 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 Optimum Small-mid and Putnam Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Optimum Small Mid Cap and Putnam Equity Income, you can compare the effects of market volatilities on Optimum Small-mid and Putnam Equity 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 Optimum Small-mid with a short position of Putnam Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optimum Small-mid and Putnam Equity.
Diversification Opportunities for Optimum Small-mid and Putnam Equity
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Optimum and Putnam is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Optimum Small Mid Cap and Putnam Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Equity Income and Optimum Small-mid 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 Optimum Small Mid Cap are associated (or correlated) with Putnam Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Equity Income has no effect on the direction of Optimum Small-mid i.e., Optimum Small-mid and Putnam Equity go up and down completely randomly.
Pair Corralation between Optimum Small-mid and Putnam Equity
Assuming the 90 days horizon Optimum Small Mid Cap is expected to generate 1.83 times more return on investment than Putnam Equity. However, Optimum Small-mid is 1.83 times more volatile than Putnam Equity Income. It trades about 0.09 of its potential returns per unit of risk. Putnam Equity Income is currently generating about 0.14 per unit of risk. If you would invest 1,332 in Optimum Small Mid Cap on September 1, 2024 and sell it today you would earn a total of 193.00 from holding Optimum Small Mid Cap or generate 14.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Optimum Small Mid Cap vs. Putnam Equity Income
Performance |
| Timeline |
| Optimum Small Mid |
| Putnam Equity Income |
Optimum Small-mid and Putnam Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optimum Small-mid and Putnam Equity
The main advantage of trading using opposite Optimum Small-mid and Putnam Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optimum Small-mid position performs unexpectedly, Putnam Equity 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 Equity will offset losses from the drop in Putnam Equity's long position.| Optimum Small-mid vs. Dana Large Cap | Optimum Small-mid vs. Large Cap Growth Profund | Optimum Small-mid vs. Fidelity Series 1000 | Optimum Small-mid vs. Jhancock Disciplined Value |
| Putnam Equity vs. Putnam Growth Opportunities | Putnam Equity vs. Putnam International Equity | Putnam Equity vs. George Putnam Fund | Putnam Equity vs. Putnam Multi Cap Growth |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |