Correlation Between Putnam Growth and Gmo Small
Can any of the company-specific risk be diversified away by investing in both Putnam Growth and Gmo Small 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 Growth and Gmo Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Growth Opportunities and Gmo Small Cap, you can compare the effects of market volatilities on Putnam Growth and Gmo Small 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 Growth with a short position of Gmo Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Growth and Gmo Small.
Diversification Opportunities for Putnam Growth and Gmo Small
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Putnam and Gmo is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Growth Opportunities and Gmo Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Small Cap and Putnam Growth 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 Growth Opportunities are associated (or correlated) with Gmo Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Small Cap has no effect on the direction of Putnam Growth i.e., Putnam Growth and Gmo Small go up and down completely randomly.
Pair Corralation between Putnam Growth and Gmo Small
Assuming the 90 days horizon Putnam Growth Opportunities is expected to generate 0.97 times more return on investment than Gmo Small. However, Putnam Growth Opportunities is 1.03 times less risky than Gmo Small. It trades about 0.1 of its potential returns per unit of risk. Gmo Small Cap is currently generating about 0.02 per unit of risk. If you would invest 4,317 in Putnam Growth Opportunities on November 27, 2024 and sell it today you would earn a total of 2,610 from holding Putnam Growth Opportunities or generate 60.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Growth Opportunities vs. Gmo Small Cap
Performance |
| Timeline |
| Putnam Growth Opport |
| Gmo Small Cap |
Putnam Growth and Gmo Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Growth and Gmo Small
The main advantage of trading using opposite Putnam Growth and Gmo Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Growth position performs unexpectedly, Gmo Small 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 Gmo Small will offset losses from the drop in Gmo Small's long position.| Putnam Growth vs. Putnam Equity Income | Putnam Growth vs. Putnam Multi Cap Growth | Putnam Growth vs. Putnam Global Health | Putnam Growth vs. Putnam International Equity |
| Gmo Small vs. Valic Company I | Gmo Small vs. Inverse Mid Cap Strategy | Gmo Small vs. Blackrock Smid Cap Growth | Gmo Small vs. T Rowe Price |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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