Correlation Between George Putnam and Putnam Research
Can any of the company-specific risk be diversified away by investing in both George Putnam and Putnam Research 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 Research 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 Research Fund, you can compare the effects of market volatilities on George Putnam and Putnam Research 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 Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of George Putnam and Putnam Research.
Diversification Opportunities for George Putnam and Putnam Research
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between George and Putnam is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding George Putnam Fund and Putnam Research Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Research 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 Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Research has no effect on the direction of George Putnam i.e., George Putnam and Putnam Research go up and down completely randomly.
Pair Corralation between George Putnam and Putnam Research
Assuming the 90 days horizon George Putnam is expected to generate 1.7 times less return on investment than Putnam Research. But when comparing it to its historical volatility, George Putnam Fund is 1.43 times less risky than Putnam Research. It trades about 0.1 of its potential returns per unit of risk. Putnam Research Fund is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,629 in Putnam Research Fund on September 3, 2024 and sell it today you would earn a total of 2,194 from holding Putnam Research Fund or generate 60.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
George Putnam Fund vs. Putnam Research Fund
Performance |
| Timeline |
| George Putnam |
| Putnam Research |
George Putnam and Putnam Research Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with George Putnam and Putnam Research
The main advantage of trading using opposite George Putnam and Putnam Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if George Putnam position performs unexpectedly, Putnam Research 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 Research will offset losses from the drop in Putnam Research's long position.| George Putnam vs. Artisan High Income | George Putnam vs. T Rowe Price | George Putnam vs. Pace High Yield | George Putnam vs. Ab High Income |
| Putnam Research vs. Putnam Growth Opportunities | Putnam Research vs. Putnam International Equity | Putnam Research vs. George Putnam Fund | Putnam Research vs. Putnam Global Health |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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