Correlation Between T Rowe and George Putnam
Can any of the company-specific risk be diversified away by investing in both T Rowe and George Putnam 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 T Rowe and George Putnam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between T Rowe Price and George Putnam Fund, you can compare the effects of market volatilities on T Rowe and George Putnam 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 T Rowe with a short position of George Putnam. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Rowe and George Putnam.
Diversification Opportunities for T Rowe and George Putnam
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PACEX and George is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding T Rowe Price and George Putnam Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on George Putnam and T Rowe 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 T Rowe Price are associated (or correlated) with George Putnam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of George Putnam has no effect on the direction of T Rowe i.e., T Rowe and George Putnam go up and down completely randomly.
Pair Corralation between T Rowe and George Putnam
Assuming the 90 days horizon T Rowe Price is expected to under-perform the George Putnam. But the mutual fund apears to be less risky and, when comparing its historical volatility, T Rowe Price is 6.32 times less risky than George Putnam. The mutual fund trades about -0.04 of its potential returns per unit of risk. The George Putnam Fund is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,601 in George Putnam Fund on September 4, 2024 and sell it today you would earn a total of 6.00 from holding George Putnam Fund or generate 0.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
T Rowe Price vs. George Putnam Fund
Performance |
| Timeline |
| T Rowe Price |
| George Putnam |
T Rowe and George Putnam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with T Rowe and George Putnam
The main advantage of trading using opposite T Rowe and George Putnam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Rowe position performs unexpectedly, George Putnam 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 George Putnam will offset losses from the drop in George Putnam's long position.| T Rowe vs. Western Asset Diversified | T Rowe vs. Massmutual Select Diversified | T Rowe vs. Aqr Diversified Arbitrage | T Rowe vs. Lord Abbett Diversified |
| George Putnam vs. T Rowe Price | George Putnam vs. Dodge Cox Emerging | George Putnam vs. Transamerica Emerging Markets | George Putnam vs. Barings Emerging Markets |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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