Correlation Between Putnam Multicap and Us Government
Can any of the company-specific risk be diversified away by investing in both Putnam Multicap and Us Government 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 Multicap and Us Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Multicap Core and Us Government Securities, you can compare the effects of market volatilities on Putnam Multicap and Us Government 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 Multicap with a short position of Us Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Multicap and Us Government.
Diversification Opportunities for Putnam Multicap and Us Government
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Putnam and USGFX is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Multicap Core and Us Government Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Government Securities and Putnam Multicap 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 Multicap Core are associated (or correlated) with Us Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Government Securities has no effect on the direction of Putnam Multicap i.e., Putnam Multicap and Us Government go up and down completely randomly.
Pair Corralation between Putnam Multicap and Us Government
Assuming the 90 days horizon Putnam Multicap Core is expected to generate 1.84 times more return on investment than Us Government. However, Putnam Multicap is 1.84 times more volatile than Us Government Securities. It trades about 0.13 of its potential returns per unit of risk. Us Government Securities is currently generating about 0.03 per unit of risk. If you would invest 3,237 in Putnam Multicap Core on September 4, 2024 and sell it today you would earn a total of 1,405 from holding Putnam Multicap Core or generate 43.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Putnam Multicap Core vs. Us Government Securities
Performance |
| Timeline |
| Putnam Multicap Core |
| Us Government Securities |
Putnam Multicap and Us Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Multicap and Us Government
The main advantage of trading using opposite Putnam Multicap and Us Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Multicap position performs unexpectedly, Us Government 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 Us Government will offset losses from the drop in Us Government's long position.| Putnam Multicap vs. Invesco Global Health | Putnam Multicap vs. Blackrock Health Sciences | Putnam Multicap vs. Delaware Healthcare Fund | Putnam Multicap vs. Alphacentric Lifesci Healthcare |
| Us Government vs. Income Fund Of | Us Government vs. American Mutual Fund | Us Government vs. American Mutual Fund | Us Government vs. American Funds Income |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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