Correlation Between George Putnam and American Mutual
Can any of the company-specific risk be diversified away by investing in both George Putnam and American Mutual 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 American Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between George Putnam Balanced and American Mutual Fund, you can compare the effects of market volatilities on George Putnam and American Mutual 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 American Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of George Putnam and American Mutual.
Diversification Opportunities for George Putnam and American Mutual
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between George and American is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding George Putnam Balanced and American Mutual Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Mutual 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 Balanced are associated (or correlated) with American Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Mutual has no effect on the direction of George Putnam i.e., George Putnam and American Mutual go up and down completely randomly.
Pair Corralation between George Putnam and American Mutual
Assuming the 90 days horizon George Putnam Balanced is expected to generate 0.84 times more return on investment than American Mutual. However, George Putnam Balanced is 1.19 times less risky than American Mutual. It trades about 0.14 of its potential returns per unit of risk. American Mutual Fund is currently generating about -0.07 per unit of risk. If you would invest 2,607 in George Putnam Balanced on September 13, 2024 and sell it today you would earn a total of 28.00 from holding George Putnam Balanced or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
George Putnam Balanced vs. American Mutual Fund
Performance |
| Timeline |
| George Putnam Balanced |
| American Mutual |
George Putnam and American Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with George Putnam and American Mutual
The main advantage of trading using opposite George Putnam and American Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if George Putnam position performs unexpectedly, American Mutual 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 American Mutual will offset losses from the drop in American Mutual's long position.| George Putnam vs. Siit Small Mid | George Putnam vs. Glg Intl Small | George Putnam vs. Ab Small Cap | George Putnam vs. Lebenthal Lisanti Small |
| American Mutual vs. New Perspective Fund | American Mutual vs. New World Fund | American Mutual vs. Washington Mutual Investors | American Mutual 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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