Correlation Between George Putnam and T Rowe
Can any of the company-specific risk be diversified away by investing in both George Putnam and T Rowe 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 T Rowe 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 T Rowe Price, you can compare the effects of market volatilities on George Putnam and T Rowe 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 T Rowe. Check out your portfolio center. Please also check ongoing floating volatility patterns of George Putnam and T Rowe.
Diversification Opportunities for George Putnam and T Rowe
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between George and RRTLX is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding George Putnam Fund and T Rowe Price in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Rowe Price 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 T Rowe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Rowe Price has no effect on the direction of George Putnam i.e., George Putnam and T Rowe go up and down completely randomly.
Pair Corralation between George Putnam and T Rowe
Assuming the 90 days horizon George Putnam Fund is expected to generate 1.69 times more return on investment than T Rowe. However, George Putnam is 1.69 times more volatile than T Rowe Price. It trades about 0.13 of its potential returns per unit of risk. T Rowe Price is currently generating about 0.01 per unit of risk. If you would invest 2,656 in George Putnam Fund on August 25, 2024 and sell it today you would earn a total of 42.00 from holding George Putnam Fund or generate 1.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
George Putnam Fund vs. T Rowe Price
Performance |
| Timeline |
| George Putnam |
| T Rowe Price |
George Putnam and T Rowe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with George Putnam and T Rowe
The main advantage of trading using opposite George Putnam and T Rowe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if George Putnam position performs unexpectedly, T Rowe 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 T Rowe will offset losses from the drop in T Rowe's long position.| George Putnam vs. Putnam Equity Income | George Putnam vs. Putnam Tax Exempt | George Putnam vs. Putnam Floating Rate | George Putnam vs. Putnam High Yield |
| T Rowe vs. Ab Municipal Bond | T Rowe vs. Schwab Treasury Inflation | T Rowe vs. Aqr Managed Futures | T Rowe vs. Loomis Sayles Inflation |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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