Correlation Between Putnam Equity and Putnam Income
Can any of the company-specific risk be diversified away by investing in both Putnam Equity and Putnam Income 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 Income 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 Income Fund, you can compare the effects of market volatilities on Putnam Equity and Putnam Income 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 Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Equity and Putnam Income.
Diversification Opportunities for Putnam Equity and Putnam Income
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Putnam and Putnam is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Equity Income and Putnam Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Income 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 Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Income has no effect on the direction of Putnam Equity i.e., Putnam Equity and Putnam Income go up and down completely randomly.
Pair Corralation between Putnam Equity and Putnam Income
Assuming the 90 days horizon Putnam Equity Income is expected to generate 2.4 times more return on investment than Putnam Income. However, Putnam Equity is 2.4 times more volatile than Putnam Income Fund. It trades about 0.18 of its potential returns per unit of risk. Putnam Income Fund is currently generating about -0.06 per unit of risk. If you would invest 3,748 in Putnam Equity Income on August 27, 2024 and sell it today you would earn a total of 102.00 from holding Putnam Equity Income or generate 2.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Equity Income vs. Putnam Income Fund
Performance |
| Timeline |
| Putnam Equity Income |
| Putnam Income |
Putnam Equity and Putnam Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Equity and Putnam Income
The main advantage of trading using opposite Putnam Equity and Putnam Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Equity position performs unexpectedly, Putnam Income 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 Income will offset losses from the drop in Putnam Income'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 |
| Putnam Income vs. George Putnam Fund | Putnam Income vs. Putnam Equity Income | Putnam Income vs. Putnam International Equity | Putnam Income vs. Aquagold International |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| CEOs Directory Screen CEOs from public companies around the world |