Correlation Between George Putnam and Putnam Diversified
Can any of the company-specific risk be diversified away by investing in both George Putnam and Putnam Diversified 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 Diversified 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 Putnam Diversified Income, you can compare the effects of market volatilities on George Putnam and Putnam Diversified 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 Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of George Putnam and Putnam Diversified.
Diversification Opportunities for George Putnam and Putnam Diversified
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between George and Putnam is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding George Putnam Balanced and Putnam Diversified Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Diversified Income 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 Putnam Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Diversified Income has no effect on the direction of George Putnam i.e., George Putnam and Putnam Diversified go up and down completely randomly.
Pair Corralation between George Putnam and Putnam Diversified
Assuming the 90 days horizon George Putnam is expected to generate 1.62 times less return on investment than Putnam Diversified. In addition to that, George Putnam is 3.23 times more volatile than Putnam Diversified Income. It trades about 0.02 of its total potential returns per unit of risk. Putnam Diversified Income is currently generating about 0.09 per unit of volatility. If you would invest 539.00 in Putnam Diversified Income on September 1, 2024 and sell it today you would earn a total of 3.00 from holding Putnam Diversified Income or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
George Putnam Balanced vs. Putnam Diversified Income
Performance |
| Timeline |
| George Putnam Balanced |
| Putnam Diversified Income |
George Putnam and Putnam Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with George Putnam and Putnam Diversified
The main advantage of trading using opposite George Putnam and Putnam Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if George Putnam position performs unexpectedly, Putnam Diversified 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 Diversified will offset losses from the drop in Putnam Diversified's long position.| George Putnam vs. Heartland Value Plus | George Putnam vs. Hennessy Nerstone Mid | George Putnam vs. Victory Rs Partners | George Putnam vs. Palm Valley Capital |
| Putnam Diversified vs. Putnam Equity Income | Putnam Diversified vs. Putnam Tax Exempt | Putnam Diversified vs. Putnam Floating Rate | Putnam Diversified 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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