Correlation Between Realestaterealreturn and George Putnam

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

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

Diversification Opportunities for Realestaterealreturn and George Putnam

0.81

Correlation Coefficient

Realestaterealreturn  George Putnam

Very poor diversification

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

Pair Corralation between Realestaterealreturn and George Putnam

Assuming the 90 days horizon Realestaterealreturn Strategy Fund is expected to under-perform the George Putnam. In addition to that, Realestaterealreturn is 1.71 times more volatile than George Putnam Fund. It trades about -0.05 of its total potential returns per unit of risk. George Putnam Fund is currently generating about 0.01 per unit of volatility. If you would invest  2,612  in George Putnam Fund on October 26, 2024 and sell it today you would earn a total of  7.00  from holding George Putnam Fund or generate 0.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.33%
Values	Daily Returns

Realestaterealreturn Strategy   vs.  George Putnam Fund

Realestaterealreturn

Risk-Adjusted Performance

0 of 100

Very Weak

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

George Putnam

Risk-Adjusted Performance

0 of 100

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 basic indicators, George Putnam is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Realestaterealreturn and George Putnam

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

The idea behind Realestaterealreturn Strategy Fund and George Putnam 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.