Correlation Between Putnam International and George Putnam
Can any of the company-specific risk be diversified away by investing in both Putnam International and George Putnam 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 International and George Putnam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam International Equity and George Putnam Balanced, you can compare the effects of market volatilities on Putnam International and George Putnam 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 International with a short position of George Putnam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam International and George Putnam.
Diversification Opportunities for Putnam International and George Putnam
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Putnam and George is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Putnam International Equity and George Putnam Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on George Putnam Balanced and Putnam International 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 International Equity are associated (or correlated) with George Putnam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of George Putnam Balanced has no effect on the direction of Putnam International i.e., Putnam International and George Putnam go up and down completely randomly.
Pair Corralation between Putnam International and George Putnam
Assuming the 90 days horizon Putnam International Equity is expected to under-perform the George Putnam. In addition to that, Putnam International is 1.05 times more volatile than George Putnam Balanced. It trades about -0.07 of its total potential returns per unit of risk. George Putnam Balanced is currently generating about -0.06 per unit of volatility. If you would invest 2,708 in George Putnam Balanced on September 13, 2024 and sell it today you would lose (45.00) from holding George Putnam Balanced or give up 1.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam International Equity vs. George Putnam Balanced
Performance |
| Timeline |
| Putnam International |
| George Putnam Balanced |
Putnam International and George Putnam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam International and George Putnam
The main advantage of trading using opposite Putnam International and George Putnam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam International position performs unexpectedly, George Putnam 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 George Putnam will offset losses from the drop in George Putnam's long position.| Putnam International vs. Putnam Multi Cap Growth | Putnam International vs. George Putnam Fund | Putnam International vs. Putnam Equity Income | Putnam International vs. Putnam International Capital |
| George Putnam vs. Putnam International Equity | George Putnam vs. Putnam Equity Income | George Putnam vs. Putnam Income Fund | George Putnam vs. Putnam Global Equity |
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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