Correlation Between George Putnam and Allianzgi Nfj

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

By analyzing existing cross correlation between George Putnam Fund and Allianzgi Nfj Small Cap, you can compare the effects of market volatilities on George Putnam and Allianzgi Nfj 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 George Putnam with a short position of Allianzgi Nfj. Check out your portfolio center. Please also check ongoing floating volatility patterns of George Putnam and Allianzgi Nfj.

Diversification Opportunities for George Putnam and Allianzgi Nfj

0.74

Correlation Coefficient

George Putnam  Allianzgi Nfj

Poor diversification

The 3 months correlation between George and Allianzgi is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding George Putnam Fund and Allianzgi Nfj Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Nfj Small and George Putnam 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 George Putnam Fund are associated (or correlated) with Allianzgi Nfj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Nfj Small has no effect on the direction of George Putnam i.e., George Putnam and Allianzgi Nfj go up and down completely randomly.

Pair Corralation between George Putnam and Allianzgi Nfj

Assuming the 90 days horizon George Putnam Fund is expected to generate 0.48 times more return on investment than Allianzgi Nfj. However, George Putnam Fund is 2.1 times less risky than Allianzgi Nfj. It trades about -0.07 of its potential returns per unit of risk. Allianzgi Nfj Small Cap is currently generating about -0.18 per unit of risk. If you would invest  2,569  in George Putnam Fund on November 29, 2024 and sell it today you would lose (62.00) from holding George Putnam Fund or give up 2.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

George Putnam Fund  vs.  Allianzgi Nfj Small Cap

George Putnam

Risk-Adjusted Performance

Very Weak

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

Allianzgi Nfj Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Allianzgi Nfj Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with George Putnam and Allianzgi Nfj

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

The idea behind George Putnam Fund and Allianzgi Nfj Small Cap 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.