Correlation Between Putnam Diversified and Auer Growth
Can any of the company-specific risk be diversified away by investing in both Putnam Diversified and Auer 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 Putnam Diversified and Auer Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Diversified Income and Auer Growth Fund, you can compare the effects of market volatilities on Putnam Diversified and Auer 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 Putnam Diversified with a short position of Auer Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Diversified and Auer Growth.
Diversification Opportunities for Putnam Diversified and Auer Growth
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Putnam and Auer is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Diversified Income and Auer Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auer Growth Fund and Putnam Diversified 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 Diversified Income are associated (or correlated) with Auer Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auer Growth Fund has no effect on the direction of Putnam Diversified i.e., Putnam Diversified and Auer Growth go up and down completely randomly.
Pair Corralation between Putnam Diversified and Auer Growth
Assuming the 90 days horizon Putnam Diversified is expected to generate 3.03 times less return on investment than Auer Growth. But when comparing it to its historical volatility, Putnam Diversified Income is 4.02 times less risky than Auer Growth. It trades about 0.08 of its potential returns per unit of risk. Auer Growth Fund is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,261 in Auer Growth Fund on September 12, 2024 and sell it today you would earn a total of 485.00 from holding Auer Growth Fund or generate 38.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Diversified Income vs. Auer Growth Fund
Performance |
| Timeline |
| Putnam Diversified Income |
| Auer Growth Fund |
Putnam Diversified and Auer Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Diversified and Auer Growth
The main advantage of trading using opposite Putnam Diversified and Auer Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Diversified position performs unexpectedly, Auer 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 Auer Growth will offset losses from the drop in Auer Growth's long position.| Putnam Diversified vs. Strategic Advisers Income | Putnam Diversified vs. Artisan High Income | Putnam Diversified vs. Pax High Yield | Putnam Diversified vs. Jpmorgan High Yield |
| Auer Growth vs. Lebenthal Lisanti Small | Auer Growth vs. Hodges Small Cap | Auer Growth vs. Schwartz Value Focused | Auer Growth vs. Oberweis Small Cap Opportunities |
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.
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