Correlation Between George Putnam and Putnam International
Can any of the company-specific risk be diversified away by investing in both George Putnam and Putnam International 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 George Putnam and Putnam International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between George Putnam Fund and Putnam International Value, you can compare the effects of market volatilities on George Putnam and Putnam International 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 George Putnam with a short position of Putnam International. Check out your portfolio center. Please also check ongoing floating volatility patterns of George Putnam and Putnam International.
Diversification Opportunities for George Putnam and Putnam International
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between George and PUTNAM is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding George Putnam Fund and Putnam International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam International and George Putnam 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 George Putnam Fund are associated (or correlated) with Putnam International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam International has no effect on the direction of George Putnam i.e., George Putnam and Putnam International go up and down completely randomly.
Pair Corralation between George Putnam and Putnam International
Assuming the 90 days horizon George Putnam is expected to generate 1.1 times less return on investment than Putnam International. But when comparing it to its historical volatility, George Putnam Fund is 1.42 times less risky than Putnam International. It trades about 0.1 of its potential returns per unit of risk. Putnam International Value is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,110 in Putnam International Value on August 27, 2024 and sell it today you would earn a total of 368.00 from holding Putnam International Value or generate 33.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
George Putnam Fund vs. Putnam International Value
Performance |
| Timeline |
| George Putnam |
| Putnam International |
George Putnam and Putnam International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with George Putnam and Putnam International
The main advantage of trading using opposite George Putnam and Putnam International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if George Putnam position performs unexpectedly, Putnam International 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 International will offset losses from the drop in Putnam International's long position.| George Putnam vs. Putnam Equity Income | George Putnam vs. Putnam Tax Exempt | George Putnam vs. Putnam Floating Rate | George Putnam vs. Putnam High Yield |
| Putnam International vs. Putnam Equity Income | Putnam International vs. Putnam Tax Exempt | Putnam International vs. Putnam Floating Rate | Putnam International 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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