Correlation Between Prudential Core and Putnam Growth
Can any of the company-specific risk be diversified away by investing in both Prudential Core and Putnam 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 Prudential Core and Putnam Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Core Conservative and Putnam Growth Opportunities, you can compare the effects of market volatilities on Prudential Core and Putnam 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 Prudential Core with a short position of Putnam Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Core and Putnam Growth.
Diversification Opportunities for Prudential Core and Putnam Growth
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Prudential and Putnam is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Core Conservative and Putnam Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Growth Opport and Prudential Core 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 Prudential Core Conservative are associated (or correlated) with Putnam Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Growth Opport has no effect on the direction of Prudential Core i.e., Prudential Core and Putnam Growth go up and down completely randomly.
Pair Corralation between Prudential Core and Putnam Growth
Assuming the 90 days horizon Prudential Core is expected to generate 13.5 times less return on investment than Putnam Growth. But when comparing it to its historical volatility, Prudential Core Conservative is 4.09 times less risky than Putnam Growth. It trades about 0.0 of its potential returns per unit of risk. Putnam Growth Opportunities is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 5,345 in Putnam Growth Opportunities on October 21, 2024 and sell it today you would lose (2.00) from holding Putnam Growth Opportunities or give up 0.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Core Conservative vs. Putnam Growth Opportunities
Performance |
| Timeline |
| Prudential Core Cons |
| Putnam Growth Opport |
Prudential Core and Putnam Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Core and Putnam Growth
The main advantage of trading using opposite Prudential Core and Putnam Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Core position performs unexpectedly, Putnam 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 Putnam Growth will offset losses from the drop in Putnam Growth's long position.| Prudential Core vs. Needham Aggressive Growth | Prudential Core vs. Eip Growth And | Prudential Core vs. Tfa Alphagen Growth | Prudential Core vs. T Rowe Price |
| Putnam Growth vs. Putnam Equity Income | Putnam Growth vs. Putnam Tax Exempt | Putnam Growth vs. Putnam Floating Rate | Putnam Growth vs. Putnam High Yield |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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