Correlation Between Growth Fund and Putnam Multicap
Can any of the company-specific risk be diversified away by investing in both Growth Fund and Putnam Multicap 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 Growth Fund and Putnam Multicap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Fund Of and Putnam Multicap Core, you can compare the effects of market volatilities on Growth Fund and Putnam Multicap 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 Growth Fund with a short position of Putnam Multicap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and Putnam Multicap.
Diversification Opportunities for Growth Fund and Putnam Multicap
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GROWTH and Putnam is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and Putnam Multicap Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Multicap Core and Growth Fund 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 Growth Fund Of are associated (or correlated) with Putnam Multicap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Multicap Core has no effect on the direction of Growth Fund i.e., Growth Fund and Putnam Multicap go up and down completely randomly.
Pair Corralation between Growth Fund and Putnam Multicap
Assuming the 90 days horizon Growth Fund Of is expected to generate 1.09 times more return on investment than Putnam Multicap. However, Growth Fund is 1.09 times more volatile than Putnam Multicap Core. It trades about 0.2 of its potential returns per unit of risk. Putnam Multicap Core is currently generating about 0.11 per unit of risk. If you would invest 7,723 in Growth Fund Of on August 24, 2024 and sell it today you would earn a total of 343.00 from holding Growth Fund Of or generate 4.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Fund Of vs. Putnam Multicap Core
Performance |
| Timeline |
| Growth Fund |
| Putnam Multicap Core |
Growth Fund and Putnam Multicap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and Putnam Multicap
The main advantage of trading using opposite Growth Fund and Putnam Multicap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund position performs unexpectedly, Putnam Multicap 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 Multicap will offset losses from the drop in Putnam Multicap's long position.| Growth Fund vs. Artisan Small Cap | Growth Fund vs. L Abbett Growth | Growth Fund vs. Ab Centrated Growth | Growth Fund vs. Franklin Growth Opportunities |
| Putnam Multicap vs. Victory Rs Growth | Putnam Multicap vs. Growth Fund Of | Putnam Multicap vs. Praxis Growth Index | Putnam Multicap vs. Rational Defensive Growth |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |