Correlation Between Putnam U and Putnam Growth
Can any of the company-specific risk be diversified away by investing in both Putnam U and Putnam Growth 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 U and Putnam Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam U S and Putnam Growth Opportunities, you can compare the effects of market volatilities on Putnam U and Putnam Growth 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 U with a short position of Putnam Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam U and Putnam Growth.
Diversification Opportunities for Putnam U and Putnam Growth
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Putnam and Putnam is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Putnam U S and Putnam Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Growth Opport and Putnam U 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 U S are associated (or correlated) with Putnam Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Growth Opport has no effect on the direction of Putnam U i.e., Putnam U and Putnam Growth go up and down completely randomly.
Pair Corralation between Putnam U and Putnam Growth
Assuming the 90 days horizon Putnam U S is expected to under-perform the Putnam Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, Putnam U S is 3.11 times less risky than Putnam Growth. The mutual fund trades about -0.07 of its potential returns per unit of risk. The Putnam Growth Opportunities is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 5,311 in Putnam Growth Opportunities on August 25, 2024 and sell it today you would earn a total of 147.00 from holding Putnam Growth Opportunities or generate 2.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam U S vs. Putnam Growth Opportunities
Performance |
| Timeline |
| Putnam U S |
| Putnam Growth Opport |
Putnam U and Putnam Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam U and Putnam Growth
The main advantage of trading using opposite Putnam U and Putnam Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam U position performs unexpectedly, Putnam Growth 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 Growth will offset losses from the drop in Putnam Growth's long position.| Putnam U vs. George Putnam Fund | Putnam U vs. Putnam Equity Income | Putnam U vs. Putnam International Equity | Putnam U vs. Aquagold International |
| Putnam Growth vs. George Putnam Fund | Putnam Growth vs. Putnam Dynamic Asset | Putnam Growth vs. Aquagold International | Putnam Growth vs. Morningstar Unconstrained Allocation |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |