Correlation Between Balanced Fund and Putnam Multi
Can any of the company-specific risk be diversified away by investing in both Balanced Fund and Putnam Multi 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 Balanced Fund and Putnam Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balanced Fund Investor and Putnam Multi Cap Growth, you can compare the effects of market volatilities on Balanced Fund and Putnam Multi 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 Balanced Fund with a short position of Putnam Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Fund and Putnam Multi.
Diversification Opportunities for Balanced Fund and Putnam Multi
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Balanced and Putnam is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Fund Investor 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 Balanced 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 Balanced Fund Investor are associated (or correlated) with Putnam Multi. 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 Balanced Fund i.e., Balanced Fund and Putnam Multi go up and down completely randomly.
Pair Corralation between Balanced Fund and Putnam Multi
Assuming the 90 days horizon Balanced Fund Investor is expected to generate 0.19 times more return on investment than Putnam Multi. However, Balanced Fund Investor is 5.4 times less risky than Putnam Multi. It trades about 0.16 of its potential returns per unit of risk. Putnam Multi Cap Growth is currently generating about -0.16 per unit of risk. If you would invest 2,009 in Balanced Fund Investor on September 13, 2024 and sell it today you would earn a total of 24.00 from holding Balanced Fund Investor or generate 1.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Balanced Fund Investor vs. Putnam Multi Cap Growth
Performance |
| Timeline |
| Balanced Fund Investor |
| Putnam Multi Cap |
Balanced Fund and Putnam Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balanced Fund and Putnam Multi
The main advantage of trading using opposite Balanced Fund and Putnam Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balanced Fund position performs unexpectedly, Putnam Multi 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 will offset losses from the drop in Putnam Multi's long position.| Balanced Fund vs. Select Fund Investor | Balanced Fund vs. Heritage Fund Investor | Balanced Fund vs. Value Fund Investor | Balanced Fund vs. Growth Fund Investor |
| Putnam Multi vs. Ab Global Bond | Putnam Multi vs. Ab Global Risk | Putnam Multi vs. Investec Global Franchise | Putnam Multi vs. Barings Global Floating |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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