Correlation Between Putnam Multi-cap and Polen Growth

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

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

Diversification Opportunities for Putnam Multi-cap and Polen Growth

0.0

Correlation Coefficient

Putnam Multi-cap  Polen Growth

Pay attention - limited upside

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

Pair Corralation between Putnam Multi-cap and Polen Growth

If you would invest  7,808  in Putnam Multi Cap Growth on December 28, 2024 and sell it today you would earn a total of  0.00  from holding Putnam Multi Cap Growth or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Putnam Multi Cap Growth  vs.  Polen Growth Fund

Putnam Multi Cap

Risk-Adjusted Performance

Very Weak

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

Polen Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days Polen Growth Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Polen 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 Putnam Multi-cap and Polen Growth

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

The idea behind Putnam Multi Cap Growth and Polen Growth Fund 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.