Correlation Between Alphacentric Symmetry and George Putnam

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

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

Diversification Opportunities for Alphacentric Symmetry and George Putnam

0.94

Correlation Coefficient

Alphacentric Symmetry  George Putnam

Almost no diversification

The 3 months correlation between Alphacentric and George is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Alphacentric Symmetry 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 Alphacentric Symmetry 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 Alphacentric Symmetry Strategy 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 Alphacentric Symmetry i.e., Alphacentric Symmetry and George Putnam go up and down completely randomly.

Pair Corralation between Alphacentric Symmetry and George Putnam

Assuming the 90 days horizon Alphacentric Symmetry Strategy is expected to under-perform the George Putnam. But the mutual fund apears to be less risky and, when comparing its historical volatility, Alphacentric Symmetry Strategy is 1.26 times less risky than George Putnam. The mutual fund trades about -0.11 of its potential returns per unit of risk. The George Putnam Fund is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  2,560  in George Putnam Fund on December 22, 2024 and sell it today you would lose (73.00) from holding George Putnam Fund or give up 2.85% of portfolio value over 90 days.

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

Alphacentric Symmetry Strategy  vs.  George Putnam Fund

Alphacentric Symmetry

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alphacentric Symmetry Strategy has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Alphacentric Symmetry 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

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 Alphacentric Symmetry and George Putnam

The main advantage of trading using opposite Alphacentric Symmetry and George Putnam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphacentric Symmetry 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 Alphacentric Symmetry Strategy 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.