Correlation Between Gamco Natural and Putnam International
Can any of the company-specific risk be diversified away by investing in both Gamco Natural and Putnam International 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 Gamco Natural and Putnam International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gamco Natural Resources and Putnam International Equity, you can compare the effects of market volatilities on Gamco Natural and Putnam International 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 Gamco Natural with a short position of Putnam International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco Natural and Putnam International.
Diversification Opportunities for Gamco Natural and Putnam International
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gamco and PUTNAM is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Natural Resources and Putnam International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam International and Gamco Natural 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 Gamco Natural Resources are associated (or correlated) with Putnam International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam International has no effect on the direction of Gamco Natural i.e., Gamco Natural and Putnam International go up and down completely randomly.
Pair Corralation between Gamco Natural and Putnam International
Assuming the 90 days horizon Gamco Natural Resources is expected to under-perform the Putnam International. In addition to that, Gamco Natural is 1.01 times more volatile than Putnam International Equity. It trades about -0.11 of its total potential returns per unit of risk. Putnam International Equity is currently generating about 0.05 per unit of volatility. If you would invest 2,739 in Putnam International Equity on September 5, 2024 and sell it today you would earn a total of 23.00 from holding Putnam International Equity or generate 0.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Gamco Natural Resources vs. Putnam International Equity
Performance |
| Timeline |
| Gamco Natural Resources |
| Putnam International |
Gamco Natural and Putnam International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamco Natural and Putnam International
The main advantage of trading using opposite Gamco Natural and Putnam International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco Natural position performs unexpectedly, Putnam International 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 International will offset losses from the drop in Putnam International's long position.| Gamco Natural vs. Touchstone Large Cap | Gamco Natural vs. Qs Large Cap | Gamco Natural vs. Fidelity Series 1000 | Gamco Natural vs. Dodge Cox Stock |
| Putnam International vs. Franklin Natural Resources | Putnam International vs. Calvert Global Energy | Putnam International vs. Firsthand Alternative Energy | Putnam International vs. Oil Gas Ultrasector |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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