Correlation Between Kinetics Small and George Putnam
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and George Putnam 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 Kinetics Small and George Putnam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinetics Small Cap and George Putnam Fund, you can compare the effects of market volatilities on Kinetics Small and George Putnam 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 Kinetics Small with a short position of George Putnam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and George Putnam.
Diversification Opportunities for Kinetics Small and George Putnam
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetics and George is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and George Putnam Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on George Putnam and Kinetics Small 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 Kinetics Small Cap are associated (or correlated) with George Putnam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of George Putnam has no effect on the direction of Kinetics Small i.e., Kinetics Small and George Putnam go up and down completely randomly.
Pair Corralation between Kinetics Small and George Putnam
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 3.32 times more return on investment than George Putnam. However, Kinetics Small is 3.32 times more volatile than George Putnam Fund. It trades about 0.14 of its potential returns per unit of risk. George Putnam Fund is currently generating about 0.12 per unit of risk. If you would invest 10,349 in Kinetics Small Cap on October 9, 2024 and sell it today you would earn a total of 8,455 from holding Kinetics Small Cap or generate 81.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Kinetics Small Cap vs. George Putnam Fund
Performance |
Timeline |
Kinetics Small Cap |
George Putnam |
Kinetics Small and George Putnam Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kinetics Small and George Putnam
The main advantage of trading using opposite Kinetics Small and George Putnam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, George Putnam 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 George Putnam will offset losses from the drop in George Putnam's long position.Kinetics Small vs. Aamhimco Short Duration | Kinetics Small vs. Oakhurst Short Duration | Kinetics Small vs. Siit Ultra Short | Kinetics Small vs. Fidelity Flex Servative |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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