Correlation Between Lord Abbett and Putnam Growth

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

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

Diversification Opportunities for Lord Abbett and Putnam Growth

0.0

Correlation Coefficient

Lord Abbett  Putnam Growth

Pay attention - limited upside

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

Pair Corralation between Lord Abbett and Putnam Growth

If you would invest  0.00  in Putnam Growth Opportunities on October 23, 2024 and sell it today you would earn a total of  0.00  from holding Putnam Growth Opportunities or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.67%
Values	Daily Returns

Lord Abbett Affiliated  vs.  Putnam Growth Opportunities

Lord Abbett Affiliated

Risk-Adjusted Performance

0 of 100

Very Weak

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

Putnam Growth Opport

Risk-Adjusted Performance

0 of 100

Insignificant

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

Pair Trading with Lord Abbett and Putnam Growth

The main advantage of trading using opposite Lord Abbett and Putnam Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett 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 Lord Abbett Affiliated 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.