Correlation Between Snap and George Putnam
Can any of the company-specific risk be diversified away by investing in both Snap 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 Snap and George Putnam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and George Putnam Fund, you can compare the effects of market volatilities on Snap 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 Snap with a short position of George Putnam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and George Putnam.
Diversification Opportunities for Snap and George Putnam
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Snap and George is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and George Putnam Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on George Putnam and Snap 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 Snap Inc 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 has no effect on the direction of Snap i.e., Snap and George Putnam go up and down completely randomly.
Pair Corralation between Snap and George Putnam
Given the investment horizon of 90 days Snap Inc is expected to generate 5.24 times more return on investment than George Putnam. However, Snap is 5.24 times more volatile than George Putnam Fund. It trades about 0.1 of its potential returns per unit of risk. George Putnam Fund is currently generating about -0.07 per unit of risk. If you would invest 1,071 in Snap Inc on August 29, 2024 and sell it today you would earn a total of 90.00 from holding Snap Inc or generate 8.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap Inc vs. George Putnam Fund
Performance |
| Timeline |
| Snap Inc |
| George Putnam |
Snap and George Putnam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and George Putnam
The main advantage of trading using opposite Snap and George Putnam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap 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.The idea behind Snap Inc and George Putnam Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| George Putnam vs. Oppenheimer Gold Special | George Putnam vs. Europac Gold Fund | George Putnam vs. Short Precious Metals | George Putnam vs. James Balanced Golden |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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