Correlation Between Mid-cap Value and Putnam Vertible

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Can any of the company-specific risk be diversified away by investing in both Mid-cap Value and Putnam Vertible 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 Mid-cap Value and Putnam Vertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mid Cap Value Profund and Putnam Vertible Securities, you can compare the effects of market volatilities on Mid-cap Value and Putnam Vertible 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 Mid-cap Value with a short position of Putnam Vertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid-cap Value and Putnam Vertible.

Diversification Opportunities for Mid-cap Value and Putnam Vertible

Mid-capPutnamDiversified AwayMid-capPutnamDiversified Away100%
0.81
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Mid-cap and Putnam is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap Value Profund and Putnam Vertible Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Vertible Secu and Mid-cap Value 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 Mid Cap Value Profund are associated (or correlated) with Putnam Vertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Vertible Secu has no effect on the direction of Mid-cap Value i.e., Mid-cap Value and Putnam Vertible go up and down completely randomly.

Pair Corralation between Mid-cap Value and Putnam Vertible

Assuming the 90 days horizon Mid Cap Value Profund is expected to under-perform the Putnam Vertible. In addition to that, Mid-cap Value is 1.48 times more volatile than Putnam Vertible Securities. It trades about -0.02 of its total potential returns per unit of risk. Putnam Vertible Securities is currently generating about 0.05 per unit of volatility. If you would invest  2,612  in Putnam Vertible Securities on November 19, 2024 and sell it today you would earn a total of  44.00  from holding Putnam Vertible Securities or generate 1.68% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Mid Cap Value Profund  vs.  Putnam Vertible Securities

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -6-4-202
JavaScript chart by amCharts 3.21.15MLPSX PCGYX
       Timeline  
Mid Cap Value 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Mid Cap Value Profund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Mid-cap Value is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb888990919293949596
Putnam Vertible Secu 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Putnam Vertible Securities are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Putnam Vertible is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb25.625.82626.226.426.626.8

Mid-cap Value and Putnam Vertible Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.45-1.08-0.71-0.34-0.03050.240.610.981.351.72 0.20.40.60.81.01.2
JavaScript chart by amCharts 3.21.15MLPSX PCGYX
       Returns  

Pair Trading with Mid-cap Value and Putnam Vertible

The main advantage of trading using opposite Mid-cap Value and Putnam Vertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid-cap Value position performs unexpectedly, Putnam Vertible 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 Vertible will offset losses from the drop in Putnam Vertible's long position.
The idea behind Mid Cap Value Profund and Putnam Vertible Securities 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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