Correlation Between George Putnam and Strategic Allocation
Can any of the company-specific risk be diversified away by investing in both George Putnam and Strategic Allocation 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 Strategic Allocation 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 Strategic Allocation Servative, you can compare the effects of market volatilities on George Putnam and Strategic Allocation 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 Strategic Allocation. Check out your portfolio center. Please also check ongoing floating volatility patterns of George Putnam and Strategic Allocation.
Diversification Opportunities for George Putnam and Strategic Allocation
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between George and Strategic is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding George Putnam Fund and Strategic Allocation Servative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Allocation 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 Strategic Allocation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Allocation has no effect on the direction of George Putnam i.e., George Putnam and Strategic Allocation go up and down completely randomly.
Pair Corralation between George Putnam and Strategic Allocation
Assuming the 90 days horizon George Putnam Fund is expected to under-perform the Strategic Allocation. In addition to that, George Putnam is 2.52 times more volatile than Strategic Allocation Servative. It trades about -0.17 of its total potential returns per unit of risk. Strategic Allocation Servative is currently generating about 0.13 per unit of volatility. If you would invest 580.00 in Strategic Allocation Servative on September 12, 2024 and sell it today you would earn a total of 5.00 from holding Strategic Allocation Servative or generate 0.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
George Putnam Fund vs. Strategic Allocation Servative
Performance |
| Timeline |
| George Putnam |
| Strategic Allocation |
George Putnam and Strategic Allocation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with George Putnam and Strategic Allocation
The main advantage of trading using opposite George Putnam and Strategic Allocation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if George Putnam position performs unexpectedly, Strategic Allocation 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 Strategic Allocation will offset losses from the drop in Strategic Allocation's long position.| George Putnam vs. Strategic Allocation Servative | George Putnam vs. Strategic Allocation Aggressive | George Putnam vs. Value Fund Investor | George Putnam vs. International Growth Fund |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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