Correlation Between George Putnam and Putnam International
Can any of the company-specific risk be diversified away by investing in both George Putnam and Putnam International 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 International 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 International Capital, you can compare the effects of market volatilities on George Putnam and Putnam International 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 International. Check out your portfolio center. Please also check ongoing floating volatility patterns of George Putnam and Putnam International.
Diversification Opportunities for George Putnam and Putnam International
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between George and Putnam is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding George Putnam Fund and Putnam International Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam International 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 International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam International has no effect on the direction of George Putnam i.e., George Putnam and Putnam International go up and down completely randomly.
Pair Corralation between George Putnam and Putnam International
Assuming the 90 days horizon George Putnam Fund is expected to generate 1.2 times more return on investment than Putnam International. However, George Putnam is 1.2 times more volatile than Putnam International Capital. It trades about -0.08 of its potential returns per unit of risk. Putnam International Capital is currently generating about -0.15 per unit of risk. If you would invest 2,664 in George Putnam Fund on August 30, 2024 and sell it today you would lose (45.00) from holding George Putnam Fund or give up 1.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
George Putnam Fund vs. Putnam International Capital
Performance |
| Timeline |
| George Putnam |
| Putnam International |
George Putnam and Putnam International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with George Putnam and Putnam International
The main advantage of trading using opposite George Putnam and Putnam International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if George Putnam position performs unexpectedly, Putnam International 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 International will offset losses from the drop in Putnam International's long position.| George Putnam vs. American Funds Retirement | George Putnam vs. Qs Moderate Growth | George Putnam vs. Hartford Moderate Allocation | George Putnam vs. Blackrock Moderate Prepared |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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