Correlation Between Putnam Focused and Putnam Equity
Can any of the company-specific risk be diversified away by investing in both Putnam Focused and Putnam Equity 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 Focused and Putnam Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Focused Equity and Putnam Equity Income, you can compare the effects of market volatilities on Putnam Focused and Putnam Equity 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 Focused with a short position of Putnam Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Focused and Putnam Equity.
Diversification Opportunities for Putnam Focused and Putnam Equity
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Putnam and Putnam is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Focused Equity and Putnam Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Equity Income and Putnam Focused 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 Focused Equity are associated (or correlated) with Putnam Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Equity Income has no effect on the direction of Putnam Focused i.e., Putnam Focused and Putnam Equity go up and down completely randomly.
Pair Corralation between Putnam Focused and Putnam Equity
Assuming the 90 days horizon Putnam Focused Equity is expected to generate 1.27 times more return on investment than Putnam Equity. However, Putnam Focused is 1.27 times more volatile than Putnam Equity Income. It trades about 0.16 of its potential returns per unit of risk. Putnam Equity Income is currently generating about 0.18 per unit of risk. If you would invest 2,903 in Putnam Focused Equity on September 2, 2024 and sell it today you would earn a total of 1,058 from holding Putnam Focused Equity or generate 36.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Focused Equity vs. Putnam Equity Income
Performance |
| Timeline |
| Putnam Focused Equity |
| Putnam Equity Income |
Putnam Focused and Putnam Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Focused and Putnam Equity
The main advantage of trading using opposite Putnam Focused and Putnam Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Focused position performs unexpectedly, Putnam Equity 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 Equity will offset losses from the drop in Putnam Equity's long position.| Putnam Focused vs. Putnam Equity Income | Putnam Focused vs. Putnam Tax Exempt | Putnam Focused vs. Putnam Floating Rate | Putnam Focused vs. Putnam High Yield |
| Putnam Equity vs. Putnam Growth Opportunities | Putnam Equity vs. Putnam International Equity | Putnam Equity vs. George Putnam Fund | Putnam Equity vs. Putnam Multi Cap Growth |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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