Correlation Between Putnam Equity and Putnam Small
Can any of the company-specific risk be diversified away by investing in both Putnam Equity and Putnam Small 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 Small 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 Small Cap, you can compare the effects of market volatilities on Putnam Equity and Putnam Small 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 Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Equity and Putnam Small.
Diversification Opportunities for Putnam Equity and Putnam Small
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Putnam and Putnam is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Equity Income and Putnam Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Small 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 Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Small Cap has no effect on the direction of Putnam Equity i.e., Putnam Equity and Putnam Small go up and down completely randomly.
Pair Corralation between Putnam Equity and Putnam Small
If you would invest 3,695 in Putnam Equity Income on September 1, 2024 and sell it today you would earn a total of 199.00 from holding Putnam Equity Income or generate 5.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Equity Income vs. Putnam Small Cap
Performance |
| Timeline |
| Putnam Equity Income |
| Putnam Small Cap |
Putnam Equity and Putnam Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Equity and Putnam Small
The main advantage of trading using opposite Putnam Equity and Putnam Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Equity position performs unexpectedly, Putnam Small 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 Small will offset losses from the drop in Putnam Small'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 Small vs. Putnam Equity Income | Putnam Small vs. Putnam Tax Exempt | Putnam Small vs. Putnam Floating Rate | Putnam Small vs. Putnam High Yield |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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