Correlation Between Putnam Growth and Kinetics Small
Can any of the company-specific risk be diversified away by investing in both Putnam Growth and Kinetics 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 Kinetics 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 Kinetics Small Cap, you can compare the effects of market volatilities on Putnam Growth and Kinetics 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 Kinetics Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Growth and Kinetics Small.
Diversification Opportunities for Putnam Growth and Kinetics Small
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Putnam and Kinetics is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Growth Opportunities and Kinetics Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics 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 Kinetics Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetics Small Cap has no effect on the direction of Putnam Growth i.e., Putnam Growth and Kinetics Small go up and down completely randomly.
Pair Corralation between Putnam Growth and Kinetics Small
Assuming the 90 days horizon Putnam Growth Opportunities is expected to under-perform the Kinetics Small. But the mutual fund apears to be less risky and, when comparing its historical volatility, Putnam Growth Opportunities is 1.56 times less risky than Kinetics Small. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Kinetics Small Cap is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 18,371 in Kinetics Small Cap on November 27, 2024 and sell it today you would earn a total of 176.00 from holding Kinetics Small Cap or generate 0.96% 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. Kinetics Small Cap
Performance |
| Timeline |
| Putnam Growth Opport |
| Kinetics Small Cap |
Putnam Growth and Kinetics Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Growth and Kinetics Small
The main advantage of trading using opposite Putnam Growth and Kinetics Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Growth position performs unexpectedly, Kinetics 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 Kinetics Small will offset losses from the drop in Kinetics 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 |
| Kinetics Small vs. Kinetics Paradigm Fund | Kinetics Small vs. Kinetics Market Opportunities | Kinetics Small vs. Pear Tree Polaris | Kinetics Small vs. Amg Managers Loomis |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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