Correlation Between Vanguard Emerging and Putnam Multi-cap
Can any of the company-specific risk be diversified away by investing in both Vanguard Emerging 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 Vanguard Emerging 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 Vanguard Emerging Markets and Putnam Multi Cap Growth, you can compare the effects of market volatilities on Vanguard Emerging 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 Vanguard Emerging with a short position of Putnam Multi-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Emerging and Putnam Multi-cap.
Diversification Opportunities for Vanguard Emerging and Putnam Multi-cap
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Vanguard and Putnam is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Emerging Markets 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 Vanguard Emerging 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 Vanguard Emerging Markets 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 Vanguard Emerging i.e., Vanguard Emerging and Putnam Multi-cap go up and down completely randomly.
Pair Corralation between Vanguard Emerging and Putnam Multi-cap
Assuming the 90 days horizon Vanguard Emerging is expected to generate 4.95 times less return on investment than Putnam Multi-cap. But when comparing it to its historical volatility, Vanguard Emerging Markets is 2.67 times less risky than Putnam Multi-cap. It trades about 0.1 of its potential returns per unit of risk. Putnam Multi Cap Growth is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 12,220 in Putnam Multi Cap Growth on November 3, 2024 and sell it today you would earn a total of 418.00 from holding Putnam Multi Cap Growth or generate 3.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Emerging Markets vs. Putnam Multi Cap Growth
Performance |
| Timeline |
| Vanguard Emerging Markets |
| Putnam Multi Cap |
Vanguard Emerging and Putnam Multi-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Emerging and Putnam Multi-cap
The main advantage of trading using opposite Vanguard Emerging and Putnam Multi-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Emerging 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.| Vanguard Emerging vs. Fidelity Advisor Financial | Vanguard Emerging vs. Financial Industries Fund | Vanguard Emerging vs. Angel Oak Financial | Vanguard Emerging vs. Ab Government Exchange |
| Putnam Multi-cap vs. Upright Growth Income | Putnam Multi-cap vs. Transamerica Capital Growth | Putnam Multi-cap vs. L Abbett Growth | Putnam Multi-cap vs. The Hartford Growth |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |