Correlation Between Short-term Government and Putnam Multi-cap
Can any of the company-specific risk be diversified away by investing in both Short-term Government and Putnam Multi-cap 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 Short-term Government and Putnam Multi-cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Short Term Government Fund and Putnam Multi Cap Growth, you can compare the effects of market volatilities on Short-term Government and Putnam Multi-cap 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 Short-term Government with a short position of Putnam Multi-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Short-term Government and Putnam Multi-cap.
Diversification Opportunities for Short-term Government and Putnam Multi-cap
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Short-term and Putnam is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Short Term Government Fund and Putnam Multi Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Multi Cap and Short-term Government 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 Short Term Government Fund are associated (or correlated) with Putnam Multi-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Multi Cap has no effect on the direction of Short-term Government i.e., Short-term Government and Putnam Multi-cap go up and down completely randomly.
Pair Corralation between Short-term Government and Putnam Multi-cap
Assuming the 90 days horizon Short Term Government Fund is not expected to generate positive returns. However, Short Term Government Fund is 6.39 times less risky than Putnam Multi-cap. It waists most of its returns potential to compensate for thr risk taken. Putnam Multi-cap is generating about 0.4 per unit of risk. If you would invest 13,201 in Putnam Multi Cap Growth on September 5, 2024 and sell it today you would earn a total of 753.00 from holding Putnam Multi Cap Growth or generate 5.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Short Term Government Fund vs. Putnam Multi Cap Growth
Performance |
| Timeline |
| Short Term Government |
| Putnam Multi Cap |
Short-term Government and Putnam Multi-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Short-term Government and Putnam Multi-cap
The main advantage of trading using opposite Short-term Government and Putnam Multi-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Short-term Government position performs unexpectedly, Putnam Multi-cap 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 Multi-cap will offset losses from the drop in Putnam Multi-cap's long position.| Short-term Government vs. Allianzgi Health Sciences | Short-term Government vs. Eventide Healthcare Life | Short-term Government vs. Blackrock Health Sciences | Short-term Government vs. Deutsche Health And |
| Putnam Multi-cap vs. Fa 529 Aggressive | Putnam Multi-cap vs. Iaadx | Putnam Multi-cap vs. Balanced Fund Investor | Putnam Multi-cap vs. Volumetric Fund Volumetric |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |