Correlation Between Putnam High and Dividend Growth

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

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

Diversification Opportunities for Putnam High and Dividend Growth

0.0

Correlation Coefficient

Putnam High  Dividend Growth

Pay attention - limited upside

The 3 months correlation between Putnam and Dividend is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Putnam High Income and Dividend Growth Split in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dividend Growth Split and Putnam High 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 Putnam High Income are associated (or correlated) with Dividend Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dividend Growth Split has no effect on the direction of Putnam High i.e., Putnam High and Dividend Growth go up and down completely randomly.

Pair Corralation between Putnam High and Dividend Growth

If you would invest  662.00  in Putnam High Income on December 1, 2024 and sell it today you would earn a total of  20.00  from holding Putnam High Income or generate 3.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Putnam High Income  vs.  Dividend Growth Split

Putnam High Income

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Putnam High Income are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable fundamental indicators, Putnam High is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Dividend Growth Split

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dividend Growth Split has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Dividend Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Putnam High and Dividend Growth

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

The idea behind Putnam High Income and Dividend Growth Split 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.