Correlation Between Putnam Focused and Putnam U
Can any of the company-specific risk be diversified away by investing in both Putnam Focused and Putnam U 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 U 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 U S, you can compare the effects of market volatilities on Putnam Focused and Putnam U 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 U. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Focused and Putnam U.
Diversification Opportunities for Putnam Focused and Putnam U
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Putnam and Putnam is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Focused Equity and Putnam U S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam U S 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 U. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam U S has no effect on the direction of Putnam Focused i.e., Putnam Focused and Putnam U go up and down completely randomly.
Pair Corralation between Putnam Focused and Putnam U
Assuming the 90 days horizon Putnam Focused Equity is expected to generate 2.24 times more return on investment than Putnam U. However, Putnam Focused is 2.24 times more volatile than Putnam U S. It trades about 0.09 of its potential returns per unit of risk. Putnam U S is currently generating about -0.04 per unit of risk. If you would invest 3,850 in Putnam Focused Equity on August 27, 2024 and sell it today you would earn a total of 58.00 from holding Putnam Focused Equity or generate 1.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Focused Equity vs. Putnam U S
Performance |
| Timeline |
| Putnam Focused Equity |
| Putnam U S |
Putnam Focused and Putnam U Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Focused and Putnam U
The main advantage of trading using opposite Putnam Focused and Putnam U positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Focused position performs unexpectedly, Putnam U 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 U will offset losses from the drop in Putnam U's long position.| Putnam Focused vs. Putnam Growth Opportunities | Putnam Focused vs. Putnam International Equity | Putnam Focused vs. George Putnam Fund | Putnam Focused vs. Putnam Small Cap |
| Putnam U vs. Fidelity Advisor Health | Putnam U vs. Invesco Global Health | Putnam U vs. Alger Health Sciences | Putnam U vs. Allianzgi Health Sciences |
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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