Correlation Between Europac Gold and Putnam Multi

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

By analyzing existing cross correlation between Europac Gold Fund and Putnam Multi Cap Growth, you can compare the effects of market volatilities on Europac Gold 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 Europac Gold with a short position of Putnam Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europac Gold and Putnam Multi.

Diversification Opportunities for Europac Gold and Putnam Multi

0.0

Correlation Coefficient

Europac Gold  Putnam Multi

Pay attention - limited upside

The 3 months correlation between Europac and Putnam is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Europac Gold Fund 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 Europac Gold 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 Europac Gold Fund 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 Europac Gold i.e., Europac Gold and Putnam Multi go up and down completely randomly.

Pair Corralation between Europac Gold and Putnam Multi

If you would invest  7,808  in Putnam Multi Cap Growth on September 15, 2024 and sell it today you would earn a total of  0.00  from holding Putnam Multi Cap Growth or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Europac Gold Fund  vs.  Putnam Multi Cap Growth

Europac Gold

Risk-Adjusted Performance

0 of 100

Very Weak

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

Putnam Multi Cap

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Europac Gold and Putnam Multi

The main advantage of trading using opposite Europac Gold and Putnam Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europac Gold 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.

The idea behind Europac Gold Fund and Putnam Multi Cap Growth 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.