Correlation Between Putnam Equity and Putnam Multi-cap
Can any of the company-specific risk be diversified away by investing in both Putnam Equity and Putnam Multi-cap 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 Equity and Putnam Multi-cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Equity Income and Putnam Multi Cap Growth, you can compare the effects of market volatilities on Putnam Equity and Putnam Multi-cap 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 Equity with a short position of Putnam Multi-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Equity and Putnam Multi-cap.
Diversification Opportunities for Putnam Equity and Putnam Multi-cap
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Putnam and Putnam is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Equity Income 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 Putnam Equity 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 Equity Income are associated (or correlated) with Putnam Multi-cap. 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 Putnam Equity i.e., Putnam Equity and Putnam Multi-cap go up and down completely randomly.
Pair Corralation between Putnam Equity and Putnam Multi-cap
Assuming the 90 days horizon Putnam Equity is expected to generate 1.18 times less return on investment than Putnam Multi-cap. But when comparing it to its historical volatility, Putnam Equity Income is 1.17 times less risky than Putnam Multi-cap. It trades about 0.16 of its potential returns per unit of risk. Putnam Multi Cap Growth is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 14,514 in Putnam Multi Cap Growth on September 3, 2024 and sell it today you would earn a total of 1,128 from holding Putnam Multi Cap Growth or generate 7.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Equity Income vs. Putnam Multi Cap Growth
Performance |
| Timeline |
| Putnam Equity Income |
| Putnam Multi Cap |
Putnam Equity and Putnam Multi-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Equity and Putnam Multi-cap
The main advantage of trading using opposite Putnam Equity and Putnam Multi-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Equity position performs unexpectedly, Putnam Multi-cap 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-cap will offset losses from the drop in Putnam Multi-cap's long position.| Putnam Equity vs. Vanguard Value Index | Putnam Equity vs. Dodge Cox Stock | Putnam Equity vs. American Mutual Fund | Putnam Equity vs. American Funds American |
| Putnam Multi-cap vs. Putnam International Equity | Putnam Multi-cap vs. George Putnam Fund | Putnam Multi-cap vs. Putnam Dynamic Asset | Putnam Multi-cap vs. Putnam Dynamic Asset |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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