Correlation Between Putnam Small and The Hartford
Can any of the company-specific risk be diversified away by investing in both Putnam Small and The Hartford 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 Small and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Small Cap and The Hartford Small, you can compare the effects of market volatilities on Putnam Small and The Hartford 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 Small with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Small and The Hartford.
Diversification Opportunities for Putnam Small and The Hartford
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Putnam and The is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Small Cap and The Hartford Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Small and Putnam Small 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 Small Cap are associated (or correlated) with The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Small has no effect on the direction of Putnam Small i.e., Putnam Small and The Hartford go up and down completely randomly.
Pair Corralation between Putnam Small and The Hartford
Assuming the 90 days horizon Putnam Small Cap is expected to generate 0.78 times more return on investment than The Hartford. However, Putnam Small Cap is 1.29 times less risky than The Hartford. It trades about -0.01 of its potential returns per unit of risk. The Hartford Small is currently generating about -0.05 per unit of risk. If you would invest 1,632 in Putnam Small Cap on October 26, 2024 and sell it today you would lose (28.00) from holding Putnam Small Cap or give up 1.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Small Cap vs. The Hartford Small
Performance |
| Timeline |
| Putnam Small Cap |
| Hartford Small |
Putnam Small and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Small and The Hartford
The main advantage of trading using opposite Putnam Small and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Small position performs unexpectedly, The Hartford 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 The Hartford will offset losses from the drop in The Hartford's long position.| Putnam Small vs. Salient Mlp Energy | Putnam Small vs. World Energy Fund | Putnam Small vs. Allianzgi Global Natural | Putnam Small vs. Pimco Energy Tactical |
| The Hartford vs. Small Midcap Dividend Income | The Hartford vs. Boyd Watterson Limited | The Hartford vs. Dgi Investment Trust | The Hartford vs. Nasdaq 100 Index Fund |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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