Correlation Between Putnam Small and Putnam Growth
Can any of the company-specific risk be diversified away by investing in both Putnam Small 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 Putnam Small and Putnam Growth 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 Putnam Growth Opportunities, you can compare the effects of market volatilities on Putnam Small 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 Putnam Small with a short position of Putnam Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Small and Putnam Growth.
Diversification Opportunities for Putnam Small and Putnam Growth
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Putnam and Putnam is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Small Cap 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 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 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 Putnam Small i.e., Putnam Small and Putnam Growth go up and down completely randomly.
Pair Corralation between Putnam Small and Putnam Growth
Assuming the 90 days horizon Putnam Small Cap is expected to under-perform the Putnam Growth. In addition to that, Putnam Small is 1.05 times more volatile than Putnam Growth Opportunities. It trades about -0.01 of its total potential returns per unit of risk. Putnam Growth Opportunities is currently generating about 0.07 per unit of volatility. If you would invest 6,918 in Putnam Growth Opportunities on October 26, 2024 and sell it today you would earn a total of 338.00 from holding Putnam Growth Opportunities or generate 4.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Small Cap vs. Putnam Growth Opportunities
Performance |
| Timeline |
| Putnam Small Cap |
| Putnam Growth Opport |
Putnam Small and Putnam Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Small and Putnam Growth
The main advantage of trading using opposite Putnam Small and Putnam Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Small 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.| Putnam Small vs. Salient Mlp Energy | Putnam Small vs. World Energy Fund | Putnam Small vs. Allianzgi Global Natural | Putnam Small vs. Pimco Energy Tactical |
| Putnam Growth vs. Putnam Equity Income | Putnam Growth vs. Putnam Multi Cap Growth | Putnam Growth vs. Putnam Global Health | Putnam Growth vs. Putnam International 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |