Correlation Between George Putnam and Putnam Short
Can any of the company-specific risk be diversified away by investing in both George Putnam and Putnam Short 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 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 Duration, you can compare the effects of market volatilities on George Putnam and Putnam Short 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of George Putnam and Putnam Short.
Diversification Opportunities for George Putnam and Putnam Short
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 Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Short Duration 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. 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 Duration has no effect on the direction of George Putnam i.e., George Putnam and Putnam Short go up and down completely randomly.
Pair Corralation between George Putnam and Putnam Short
Assuming the 90 days horizon George Putnam Fund is expected to generate 5.76 times more return on investment than Putnam Short. However, George Putnam is 5.76 times more volatile than Putnam Short Duration. It trades about 0.1 of its potential returns per unit of risk. Putnam Short Duration is currently generating about 0.22 per unit of risk. If you would invest 1,940 in George Putnam Fund on September 3, 2024 and sell it today you would earn a total of 629.00 from holding George Putnam Fund or generate 32.42% 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 Short Duration
Performance |
| Timeline |
| George Putnam |
| Putnam Short Duration |
George Putnam and Putnam Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with George Putnam and Putnam Short
The main advantage of trading using opposite George Putnam and Putnam Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if George Putnam position performs unexpectedly, Putnam Short 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 will offset losses from the drop in Putnam Short'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 Short vs. Pimco Short Term Fund | Putnam Short vs. Short Term Fund Institutional | Putnam Short vs. Putnam Ultra Short | Putnam Short vs. Lord Abbett Ultra |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |