Correlation Between George Putnam and Putnam Short-term
Can any of the company-specific risk be diversified away by investing in both George Putnam and Putnam Short-term 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 Short-term 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 Short Term Municipal, you can compare the effects of market volatilities on George Putnam and Putnam Short-term 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 Short-term. Check out your portfolio center. Please also check ongoing floating volatility patterns of George Putnam and Putnam Short-term.
Diversification Opportunities for George Putnam and Putnam Short-term
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between George and Putnam is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding George Putnam Fund and Putnam Short Term Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Short Term 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 Short-term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Short Term has no effect on the direction of George Putnam i.e., George Putnam and Putnam Short-term go up and down completely randomly.
Pair Corralation between George Putnam and Putnam Short-term
Assuming the 90 days horizon George Putnam Fund is expected to generate 5.15 times more return on investment than Putnam Short-term. However, George Putnam is 5.15 times more volatile than Putnam Short Term Municipal. It trades about 0.11 of its potential returns per unit of risk. Putnam Short Term Municipal is currently generating about 0.14 per unit of risk. If you would invest 1,982 in George Putnam Fund on September 1, 2024 and sell it today you would earn a total of 541.00 from holding George Putnam Fund or generate 27.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
George Putnam Fund vs. Putnam Short Term Municipal
Performance |
| Timeline |
| George Putnam |
| Putnam Short Term |
George Putnam and Putnam Short-term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with George Putnam and Putnam Short-term
The main advantage of trading using opposite George Putnam and Putnam Short-term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if George Putnam position performs unexpectedly, Putnam Short-term 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 Short-term will offset losses from the drop in Putnam Short-term'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 Short-term vs. Putnam Equity Income | Putnam Short-term vs. Putnam Tax Exempt | Putnam Short-term vs. Putnam Floating Rate | Putnam Short-term 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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