Correlation Between Putnam Income and George Putnam
Can any of the company-specific risk be diversified away by investing in both Putnam Income and George Putnam 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 Income and George Putnam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Income Fund and George Putnam Fund, you can compare the effects of market volatilities on Putnam Income and George Putnam 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 Income with a short position of George Putnam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Income and George Putnam.
Diversification Opportunities for Putnam Income and George Putnam
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Putnam and George is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Income Fund and George Putnam Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on George Putnam and Putnam Income 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 Income Fund are associated (or correlated) with George Putnam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of George Putnam has no effect on the direction of Putnam Income i.e., Putnam Income and George Putnam go up and down completely randomly.
Pair Corralation between Putnam Income and George Putnam
Assuming the 90 days horizon Putnam Income is expected to generate 1.84 times less return on investment than George Putnam. But when comparing it to its historical volatility, Putnam Income Fund is 1.88 times less risky than George Putnam. It trades about 0.06 of its potential returns per unit of risk. George Putnam Fund is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,514 in George Putnam Fund on September 14, 2024 and sell it today you would earn a total of 106.00 from holding George Putnam Fund or generate 4.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Income Fund vs. George Putnam Fund
Performance |
| Timeline |
| Putnam Income |
| George Putnam |
Putnam Income and George Putnam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Income and George Putnam
The main advantage of trading using opposite Putnam Income and George Putnam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Income position performs unexpectedly, George Putnam 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 George Putnam will offset losses from the drop in George Putnam's long position.| Putnam Income vs. George Putnam Fund | Putnam Income vs. Putnam Equity Income | Putnam Income vs. Putnam International Equity | Putnam Income vs. Putnam Dynamic Asset |
| George Putnam vs. Putnam International Equity | George Putnam vs. Putnam Equity Income | George Putnam vs. Putnam Income Fund | George Putnam vs. Putnam Global Equity |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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