Correlation Between Putnam Dynamic and Vy Goldman

Can any of the company-specific risk be diversified away by investing in both Putnam Dynamic and Vy Goldman 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 Dynamic and Vy Goldman into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Putnam Dynamic Asset and Vy Goldman Sachs, you can compare the effects of market volatilities on Putnam Dynamic and Vy Goldman 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 Dynamic with a short position of Vy Goldman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Dynamic and Vy Goldman.

Diversification Opportunities for Putnam Dynamic and Vy Goldman

-0.26

Correlation Coefficient

Putnam Dynamic  Vy Goldman

Very good diversification

The 3 months correlation between Putnam and VGSBX is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Dynamic Asset and Vy Goldman Sachs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vy Goldman Sachs and Putnam Dynamic 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 Dynamic Asset are associated (or correlated) with Vy Goldman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vy Goldman Sachs has no effect on the direction of Putnam Dynamic i.e., Putnam Dynamic and Vy Goldman go up and down completely randomly.

Pair Corralation between Putnam Dynamic and Vy Goldman

Assuming the 90 days horizon Putnam Dynamic Asset is expected to under-perform the Vy Goldman. In addition to that, Putnam Dynamic is 2.96 times more volatile than Vy Goldman Sachs. It trades about -0.05 of its total potential returns per unit of risk. Vy Goldman Sachs is currently generating about 0.1 per unit of volatility. If you would invest  925.00  in Vy Goldman Sachs on December 28, 2024 and sell it today you would earn a total of  13.00  from holding Vy Goldman Sachs or generate 1.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Putnam Dynamic Asset  vs.  Vy Goldman Sachs

Putnam Dynamic Asset

Risk-Adjusted Performance

Very Weak

Over the last 90 days Putnam Dynamic Asset has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Putnam Dynamic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Vy Goldman Sachs

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vy Goldman Sachs are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Vy Goldman is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Putnam Dynamic and Vy Goldman

The main advantage of trading using opposite Putnam Dynamic and Vy Goldman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Dynamic position performs unexpectedly, Vy Goldman 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 Vy Goldman will offset losses from the drop in Vy Goldman's long position.

The idea behind Putnam Dynamic Asset and Vy Goldman Sachs pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.