Correlation Between Putnam Small and Neuberger Berman
Can any of the company-specific risk be diversified away by investing in both Putnam Small and Neuberger Berman 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 Neuberger Berman 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 Neuberger Berman Small, you can compare the effects of market volatilities on Putnam Small and Neuberger Berman 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 Neuberger Berman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Small and Neuberger Berman.
Diversification Opportunities for Putnam Small and Neuberger Berman
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Putnam and Neuberger is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Small Cap and Neuberger Berman Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman 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 Neuberger Berman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neuberger Berman Small has no effect on the direction of Putnam Small i.e., Putnam Small and Neuberger Berman go up and down completely randomly.
Pair Corralation between Putnam Small and Neuberger Berman
Assuming the 90 days horizon Putnam Small Cap is expected to generate 0.57 times more return on investment than Neuberger Berman. However, Putnam Small Cap is 1.75 times less risky than Neuberger Berman. It trades about 0.14 of its potential returns per unit of risk. Neuberger Berman Small is currently generating about -0.01 per unit of risk. If you would invest 1,568 in Putnam Small Cap on November 5, 2024 and sell it today you would earn a total of 35.00 from holding Putnam Small Cap or generate 2.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Small Cap vs. Neuberger Berman Small
Performance |
| Timeline |
| Putnam Small Cap |
| Neuberger Berman Small |
Putnam Small and Neuberger Berman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Small and Neuberger Berman
The main advantage of trading using opposite Putnam Small and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Small position performs unexpectedly, Neuberger Berman 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 Neuberger Berman will offset losses from the drop in Neuberger Berman's long position.| Putnam Small vs. T Rowe Price | Putnam Small vs. Ab Bond Inflation | Putnam Small vs. Baird Quality Intermediate | Putnam Small vs. Massmutual Premier High |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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