Correlation Between Income Fund and George Putnam
Can any of the company-specific risk be diversified away by investing in both Income Fund and George Putnam 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 Income Fund and George Putnam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Income Fund Of and George Putnam Fund, you can compare the effects of market volatilities on Income Fund and George Putnam 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 Income Fund with a short position of George Putnam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Income Fund and George Putnam.
Diversification Opportunities for Income Fund and George Putnam
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Income and George is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Income Fund Of and George Putnam Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on George Putnam and Income 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 Income Fund Of are associated (or correlated) with George Putnam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of George Putnam has no effect on the direction of Income Fund i.e., Income Fund and George Putnam go up and down completely randomly.
Pair Corralation between Income Fund and George Putnam
Assuming the 90 days horizon Income Fund is expected to generate 1.44 times less return on investment than George Putnam. But when comparing it to its historical volatility, Income Fund Of is 1.05 times less risky than George Putnam. It trades about 0.16 of its potential returns per unit of risk. George Putnam Fund is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2,025 in George Putnam Fund on January 19, 2024 and sell it today you would earn a total of 316.00 from holding George Putnam Fund or generate 15.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Income Fund Of vs. George Putnam Fund
Performance |
| Timeline |
| Income Fund |
| George Putnam |
Income Fund and George Putnam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Income Fund and George Putnam
The main advantage of trading using opposite Income Fund and George Putnam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Income Fund position performs unexpectedly, George Putnam 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 George Putnam will offset losses from the drop in George Putnam's long position.| Income Fund vs. Pace High Yield | Income Fund vs. Nuveen Oregon Intermediate | Income Fund vs. Bbh Intermediate Municipal | Income Fund vs. Artisan High Income |
| George Putnam vs. HUMANA INC | George Putnam vs. Aquagold International | George Putnam vs. Spring Valley Acquisition |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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