Correlation Between Putnam Growth and Putnam Focused
Can any of the company-specific risk be diversified away by investing in both Putnam Growth and Putnam Focused 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 Putnam Focused 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 Putnam Focused Equity, you can compare the effects of market volatilities on Putnam Growth and Putnam Focused 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 Putnam Focused. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Growth and Putnam Focused.
Diversification Opportunities for Putnam Growth and Putnam Focused
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Putnam and Putnam is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Growth Opportunities and Putnam Focused Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Focused Equity 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 Putnam Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Focused Equity has no effect on the direction of Putnam Growth i.e., Putnam Growth and Putnam Focused go up and down completely randomly.
Pair Corralation between Putnam Growth and Putnam Focused
Assuming the 90 days horizon Putnam Growth is expected to generate 1.19 times less return on investment than Putnam Focused. In addition to that, Putnam Growth is 1.35 times more volatile than Putnam Focused Equity. It trades about 0.09 of its total potential returns per unit of risk. Putnam Focused Equity is currently generating about 0.15 per unit of volatility. If you would invest 3,831 in Putnam Focused Equity on August 31, 2024 and sell it today you would earn a total of 103.00 from holding Putnam Focused Equity or generate 2.69% 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. Putnam Focused Equity
Performance |
| Timeline |
| Putnam Growth Opport |
| Putnam Focused Equity |
Putnam Growth and Putnam Focused Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Growth and Putnam Focused
The main advantage of trading using opposite Putnam Growth and Putnam Focused positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Growth position performs unexpectedly, Putnam Focused 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 Putnam Focused will offset losses from the drop in Putnam Focused'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 |
| Putnam Focused vs. Virtus Convertible | Putnam Focused vs. Lord Abbett Convertible | Putnam Focused vs. Rationalpier 88 Convertible | Putnam Focused vs. Harbor Vertible Securities |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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