Correlation Between Putnam Equity and The Hartford
Can any of the company-specific risk be diversified away by investing in both Putnam Equity and The Hartford 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 The Hartford 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 The Hartford Small, you can compare the effects of market volatilities on Putnam Equity and The Hartford 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 The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Equity and The Hartford.
Diversification Opportunities for Putnam Equity and The Hartford
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Putnam and The is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Equity Income and The Hartford Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Small 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 The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Small has no effect on the direction of Putnam Equity i.e., Putnam Equity and The Hartford go up and down completely randomly.
Pair Corralation between Putnam Equity and The Hartford
Assuming the 90 days horizon Putnam Equity Income is expected to generate 0.46 times more return on investment than The Hartford. However, Putnam Equity Income is 2.16 times less risky than The Hartford. It trades about -0.1 of its potential returns per unit of risk. The Hartford Small is currently generating about -0.14 per unit of risk. If you would invest 3,621 in Putnam Equity Income on November 27, 2024 and sell it today you would lose (43.00) from holding Putnam Equity Income or give up 1.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Equity Income vs. The Hartford Small
Performance |
| Timeline |
| Putnam Equity Income |
| Hartford Small |
Putnam Equity and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Equity and The Hartford
The main advantage of trading using opposite Putnam Equity and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Equity position performs unexpectedly, The Hartford 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 The Hartford will offset losses from the drop in The Hartford's long position.| Putnam Equity vs. Putnam Growth Opportunities | Putnam Equity vs. Putnam International Equity | Putnam Equity vs. George Putnam Fund | Putnam Equity vs. Putnam Multi Cap Growth |
| The Hartford vs. Transamerica Financial Life | The Hartford vs. Blackrock Smid Cap Growth | The Hartford vs. T Rowe Price | The Hartford vs. T Rowe Price |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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