Correlation Between Putnam Europe and Putnam Multi
Can any of the company-specific risk be diversified away by investing in both Putnam Europe and Putnam Multi 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 Europe and Putnam Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Europe Eq and Putnam Multi Cap Growth, you can compare the effects of market volatilities on Putnam Europe and Putnam Multi 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 Europe with a short position of Putnam Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Europe and Putnam Multi.
Diversification Opportunities for Putnam Europe and Putnam Multi
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Putnam and Putnam is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Europe Eq 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 Europe 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 Europe Eq are associated (or correlated) with Putnam Multi. 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 Europe i.e., Putnam Europe and Putnam Multi go up and down completely randomly.
Pair Corralation between Putnam Europe and Putnam Multi
If you would invest 10,005 in Putnam Multi Cap Growth on December 7, 2024 and sell it today you would earn a total of 3,306 from holding Putnam Multi Cap Growth or generate 33.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Putnam Europe Eq vs. Putnam Multi Cap Growth
Performance |
| Timeline |
| Putnam Europe Eq |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Putnam Multi Cap |
Putnam Europe and Putnam Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Europe and Putnam Multi
The main advantage of trading using opposite Putnam Europe and Putnam Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Europe position performs unexpectedly, Putnam Multi 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 will offset losses from the drop in Putnam Multi's long position.| Putnam Europe vs. Lord Abbett Convertible | ||
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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