Correlation Between Virtus Nfj and Putnam Multi-cap
Can any of the company-specific risk be diversified away by investing in both Virtus Nfj 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 Virtus Nfj 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 Virtus Nfj Large Cap and Putnam Multi Cap Value, you can compare the effects of market volatilities on Virtus Nfj 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 Virtus Nfj with a short position of Putnam Multi-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Nfj and Putnam Multi-cap.
Diversification Opportunities for Virtus Nfj and Putnam Multi-cap
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Virtus and Putnam is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Nfj Large Cap and Putnam Multi Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Multi Cap and Virtus Nfj 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 Virtus Nfj Large Cap 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 Virtus Nfj i.e., Virtus Nfj and Putnam Multi-cap go up and down completely randomly.
Pair Corralation between Virtus Nfj and Putnam Multi-cap
Assuming the 90 days horizon Virtus Nfj is expected to generate 1.25 times less return on investment than Putnam Multi-cap. But when comparing it to its historical volatility, Virtus Nfj Large Cap is 1.17 times less risky than Putnam Multi-cap. It trades about 0.36 of its potential returns per unit of risk. Putnam Multi Cap Value is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 1,802 in Putnam Multi Cap Value on September 1, 2024 and sell it today you would earn a total of 134.00 from holding Putnam Multi Cap Value or generate 7.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Virtus Nfj Large Cap vs. Putnam Multi Cap Value
Performance |
| Timeline |
| Virtus Nfj Large |
| Putnam Multi Cap |
Virtus Nfj and Putnam Multi-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Nfj and Putnam Multi-cap
The main advantage of trading using opposite Virtus Nfj and Putnam Multi-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Nfj 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.| Virtus Nfj vs. Virtus Multi Strategy Target | Virtus Nfj vs. Virtus Multi Sector Short | Virtus Nfj vs. Ridgeworth Seix High | Virtus Nfj vs. Ridgeworth Innovative Growth |
| Putnam Multi-cap vs. Putnam Equity Income | Putnam Multi-cap vs. Putnam Tax Exempt | Putnam Multi-cap vs. Putnam Floating Rate | Putnam Multi-cap 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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