Correlation Between Putnam Growth and Fabxx
Can any of the company-specific risk be diversified away by investing in both Putnam Growth and Fabxx 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 Putnam Growth and Fabxx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Growth Opportunities and Fabxx, you can compare the effects of market volatilities on Putnam Growth and Fabxx 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 Putnam Growth with a short position of Fabxx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Growth and Fabxx.
Diversification Opportunities for Putnam Growth and Fabxx
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Putnam and Fabxx is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Growth Opportunities and Fabxx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fabxx and Putnam Growth 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 Putnam Growth Opportunities are associated (or correlated) with Fabxx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fabxx has no effect on the direction of Putnam Growth i.e., Putnam Growth and Fabxx go up and down completely randomly.
Pair Corralation between Putnam Growth and Fabxx
Assuming the 90 days horizon Putnam Growth Opportunities is expected to generate 0.24 times more return on investment than Fabxx. However, Putnam Growth Opportunities is 4.13 times less risky than Fabxx. It trades about 0.18 of its potential returns per unit of risk. Fabxx is currently generating about -0.02 per unit of risk. If you would invest 6,966 in Putnam Growth Opportunities on September 3, 2024 and sell it today you would earn a total of 831.00 from holding Putnam Growth Opportunities or generate 11.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Growth Opportunities vs. Fabxx
Performance |
| Timeline |
| Putnam Growth Opport |
| Fabxx |
Putnam Growth and Fabxx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Growth and Fabxx
The main advantage of trading using opposite Putnam Growth and Fabxx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Growth position performs unexpectedly, Fabxx 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 Fabxx will offset losses from the drop in Fabxx's long position.| Putnam Growth vs. Fabxx | Putnam Growth vs. Leggmason Partners Institutional | Putnam Growth vs. Aam Select Income | Putnam Growth vs. Materials Portfolio Fidelity |
| Fabxx vs. Vanguard Total Stock | Fabxx vs. Vanguard 500 Index | Fabxx vs. Vanguard Total Stock | Fabxx vs. Vanguard Total Stock |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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