Correlation Between Putnam Growth and Emerald Growth
Can any of the company-specific risk be diversified away by investing in both Putnam Growth and Emerald Growth 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 Emerald Growth 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 Emerald Growth Fund, you can compare the effects of market volatilities on Putnam Growth and Emerald Growth 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 Emerald Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Growth and Emerald Growth.
Diversification Opportunities for Putnam Growth and Emerald Growth
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Putnam and Emerald is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Growth Opportunities and Emerald Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerald Growth 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 Emerald Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerald Growth has no effect on the direction of Putnam Growth i.e., Putnam Growth and Emerald Growth go up and down completely randomly.
Pair Corralation between Putnam Growth and Emerald Growth
Assuming the 90 days horizon Putnam Growth is expected to generate 2.51 times less return on investment than Emerald Growth. But when comparing it to its historical volatility, Putnam Growth Opportunities is 1.51 times less risky than Emerald Growth. It trades about 0.13 of its potential returns per unit of risk. Emerald Growth Fund is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2,491 in Emerald Growth Fund on August 29, 2024 and sell it today you would earn a total of 216.00 from holding Emerald Growth Fund or generate 8.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Growth Opportunities vs. Emerald Growth Fund
Performance |
| Timeline |
| Putnam Growth Opport |
| Emerald Growth |
Putnam Growth and Emerald Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Growth and Emerald Growth
The main advantage of trading using opposite Putnam Growth and Emerald Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Growth position performs unexpectedly, Emerald Growth 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 Emerald Growth will offset losses from the drop in Emerald Growth'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 |
| Emerald Growth vs. Putnam Equity Income | Emerald Growth vs. Putnam Growth Opportunities | Emerald Growth vs. HUMANA INC | Emerald Growth vs. Aquagold International |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |