Correlation Between George Putnam and Income Fund
Can any of the company-specific risk be diversified away by investing in both George Putnam and Income Fund 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 George Putnam and Income Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between George Putnam Fund and Income Fund Of, you can compare the effects of market volatilities on George Putnam and Income Fund 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 George Putnam with a short position of Income Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of George Putnam and Income Fund.
Diversification Opportunities for George Putnam and Income Fund
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between George and Income is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding George Putnam Fund and Income Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Income Fund and George Putnam 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 George Putnam Fund are associated (or correlated) with Income Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Income Fund has no effect on the direction of George Putnam i.e., George Putnam and Income Fund go up and down completely randomly.
Pair Corralation between George Putnam and Income Fund
Assuming the 90 days horizon George Putnam Fund is expected to under-perform the Income Fund. But the mutual fund apears to be less risky and, when comparing its historical volatility, George Putnam Fund is 1.05 times less risky than Income Fund. The mutual fund trades about -0.35 of its potential returns per unit of risk. The Income Fund Of is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest 2,401 in Income Fund Of on January 24, 2024 and sell it today you would lose (45.00) from holding Income Fund Of or give up 1.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
George Putnam Fund vs. Income Fund Of
Performance |
| Timeline |
| George Putnam |
| Income Fund |
George Putnam and Income Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with George Putnam and Income Fund
The main advantage of trading using opposite George Putnam and Income Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if George Putnam position performs unexpectedly, Income Fund 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 Income Fund will offset losses from the drop in Income Fund's long position.| George Putnam vs. Putnam International Equity | George Putnam vs. Putnam Equity Income | George Putnam vs. Putnam Income Fund | George Putnam vs. Putnam Global Equity |
| Income Fund vs. New World Fund | Income Fund vs. American Mutual Fund | Income Fund vs. American Mutual Fund | Income Fund vs. American Funds Income |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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