Correlation Between Putnam Growth and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Putnam Growth and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Putnam Growth and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Growth and Dow Jones.
Diversification Opportunities for Putnam Growth and Dow Jones
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Putnam and Dow is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Growth Opportunities and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Putnam Growth i.e., Putnam Growth and Dow Jones go up and down completely randomly.
Pair Corralation between Putnam Growth and Dow Jones
Assuming the 90 days horizon Putnam Growth is expected to generate 1.71 times less return on investment than Dow Jones. In addition to that, Putnam Growth is 1.17 times more volatile than Dow Jones Industrial. It trades about 0.13 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.26 per unit of volatility. If you would invest 4,238,757 in Dow Jones Industrial on August 29, 2024 and sell it today you would earn a total of 247,274 from holding Dow Jones Industrial or generate 5.83% 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. Dow Jones Industrial
Performance |
| Timeline |
Putnam Growth and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Putnam Growth Opportunities
Pair trading matchups for Putnam Growth
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Putnam Growth and Dow Jones
The main advantage of trading using opposite Putnam Growth and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Growth position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Putnam Growth vs. Sterling Capital Stratton | Putnam Growth vs. Forum Real Estate | Putnam Growth vs. Teachers Insurance And | Putnam Growth vs. Virtus Real Estate |
| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
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.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |