Correlation Between 1919 Financial and George Putnam
Can any of the company-specific risk be diversified away by investing in both 1919 Financial and George Putnam 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 1919 Financial and George Putnam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 1919 Financial Services and George Putnam Balanced, you can compare the effects of market volatilities on 1919 Financial and George Putnam 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 1919 Financial with a short position of George Putnam. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1919 Financial and George Putnam.
Diversification Opportunities for 1919 Financial and George Putnam
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 1919 and George is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding 1919 Financial Services and George Putnam Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on George Putnam Balanced and 1919 Financial 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 1919 Financial Services are associated (or correlated) with George Putnam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of George Putnam Balanced has no effect on the direction of 1919 Financial i.e., 1919 Financial and George Putnam go up and down completely randomly.
Pair Corralation between 1919 Financial and George Putnam
Assuming the 90 days horizon 1919 Financial Services is expected to generate 3.03 times more return on investment than George Putnam. However, 1919 Financial is 3.03 times more volatile than George Putnam Balanced. It trades about 0.24 of its potential returns per unit of risk. George Putnam Balanced is currently generating about 0.13 per unit of risk. If you would invest 3,139 in 1919 Financial Services on August 28, 2024 and sell it today you would earn a total of 265.00 from holding 1919 Financial Services or generate 8.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
1919 Financial Services vs. George Putnam Balanced
Performance |
| Timeline |
| 1919 Financial Services |
| George Putnam Balanced |
1919 Financial and George Putnam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 1919 Financial and George Putnam
The main advantage of trading using opposite 1919 Financial and George Putnam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1919 Financial position performs unexpectedly, George Putnam 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 George Putnam will offset losses from the drop in George Putnam's long position.| 1919 Financial vs. Ultra Short Term Fixed | 1919 Financial vs. Ab Select Equity | 1919 Financial vs. The Hartford Equity | 1919 Financial vs. Artisan Select Equity |
| George Putnam vs. Putnam Equity Income | George Putnam vs. Putnam Tax Exempt | George Putnam vs. Putnam Floating Rate | George Putnam 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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