Correlation Between Putnam Sustainable and Putnam Multi
Can any of the company-specific risk be diversified away by investing in both Putnam Sustainable and Putnam Multi 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 Putnam Sustainable and Putnam Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Sustainable Future and Putnam Multi Cap Growth, you can compare the effects of market volatilities on Putnam Sustainable and Putnam Multi 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 Putnam Sustainable with a short position of Putnam Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Sustainable and Putnam Multi.
Diversification Opportunities for Putnam Sustainable and Putnam Multi
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Putnam and Putnam is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Sustainable Future 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 Putnam Sustainable 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 Putnam Sustainable Future are associated (or correlated) with Putnam Multi. 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 Putnam Sustainable i.e., Putnam Sustainable and Putnam Multi go up and down completely randomly.
Pair Corralation between Putnam Sustainable and Putnam Multi
Assuming the 90 days horizon Putnam Sustainable Future is expected to under-perform the Putnam Multi. In addition to that, Putnam Sustainable is 1.11 times more volatile than Putnam Multi Cap Growth. It trades about -0.21 of its total potential returns per unit of risk. Putnam Multi Cap Growth is currently generating about -0.19 per unit of volatility. If you would invest 11,599 in Putnam Multi Cap Growth on January 28, 2024 and sell it today you would lose (400.00) from holding Putnam Multi Cap Growth or give up 3.45% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Putnam Sustainable Future vs. Putnam Multi Cap Growth
Performance |
Timeline |
Putnam Sustainable Future |
Putnam Multi Cap |
Putnam Sustainable and Putnam Multi Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Putnam Sustainable and Putnam Multi
The main advantage of trading using opposite Putnam Sustainable and Putnam Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Sustainable position performs unexpectedly, Putnam Multi 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 will offset losses from the drop in Putnam Multi's long position.Putnam Sustainable vs. Federated Kaufmann Small | Putnam Sustainable vs. Mfs New Discovery | Putnam Sustainable vs. Virtus Kar Small Cap | Putnam Sustainable vs. Prudential Jennison International |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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