Correlation Between Putnam Dynamic and Gold
Can any of the company-specific risk be diversified away by investing in both Putnam Dynamic and Gold 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 Putnam Dynamic and Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Dynamic Asset and Gold And Precious, you can compare the effects of market volatilities on Putnam Dynamic and Gold 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 Putnam Dynamic with a short position of Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Dynamic and Gold.
Diversification Opportunities for Putnam Dynamic and Gold
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Putnam and Gold is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Dynamic Asset and Gold And Precious in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold And Precious and Putnam Dynamic 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 Putnam Dynamic Asset are associated (or correlated) with Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold And Precious has no effect on the direction of Putnam Dynamic i.e., Putnam Dynamic and Gold go up and down completely randomly.
Pair Corralation between Putnam Dynamic and Gold
Assuming the 90 days horizon Putnam Dynamic is expected to generate 3.89 times less return on investment than Gold. But when comparing it to its historical volatility, Putnam Dynamic Asset is 4.69 times less risky than Gold. It trades about 0.16 of its potential returns per unit of risk. Gold And Precious is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,187 in Gold And Precious on September 15, 2024 and sell it today you would earn a total of 58.00 from holding Gold And Precious or generate 4.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Putnam Dynamic Asset vs. Gold And Precious
Performance |
| Timeline |
| Putnam Dynamic Asset |
| Gold And Precious |
Putnam Dynamic and Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Dynamic and Gold
The main advantage of trading using opposite Putnam Dynamic and Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Dynamic position performs unexpectedly, Gold 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 Gold will offset losses from the drop in Gold's long position.| Putnam Dynamic vs. Putnam International Equity | Putnam Dynamic vs. Putnam Equity Income | Putnam Dynamic vs. Putnam Income Fund | Putnam Dynamic vs. Putnam Global Equity |
| Gold vs. Goldman Sachs Clean | Gold vs. Short Precious Metals | Gold vs. James Balanced Golden | Gold vs. Global Gold Fund |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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