Correlation Between Nuveen Real and Putnam Growth

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

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

Diversification Opportunities for Nuveen Real and Putnam Growth

-0.43

Correlation Coefficient

Nuveen Real  Putnam Growth

Very good diversification

The 3 months correlation between Nuveen and Putnam is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Real Estate and Putnam Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Growth Opport and Nuveen Real 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 Nuveen Real Estate are associated (or correlated) with Putnam Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Growth Opport has no effect on the direction of Nuveen Real i.e., Nuveen Real and Putnam Growth go up and down completely randomly.

Pair Corralation between Nuveen Real and Putnam Growth

Assuming the 90 days horizon Nuveen Real Estate is expected to generate 0.68 times more return on investment than Putnam Growth. However, Nuveen Real Estate is 1.47 times less risky than Putnam Growth. It trades about 0.03 of its potential returns per unit of risk. Putnam Growth Opportunities is currently generating about -0.11 per unit of risk. If you would invest  1,445  in Nuveen Real Estate on December 20, 2024 and sell it today you would earn a total of  24.00  from holding Nuveen Real Estate or generate 1.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Nuveen Real Estate  vs.  Putnam Growth Opportunities

Nuveen Real Estate

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Real Estate are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Nuveen Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Putnam Growth Opport

Risk-Adjusted Performance

Very Weak

Over the last 90 days Putnam Growth Opportunities has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Nuveen Real and Putnam Growth

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

The idea behind Nuveen Real Estate and Putnam Growth Opportunities 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.