Correlation Between Investec Emerging and Putnam Multi
Can any of the company-specific risk be diversified away by investing in both Investec Emerging and Putnam Multi 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 Investec Emerging and Putnam Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investec Emerging Markets and Putnam Multi Cap Growth, you can compare the effects of market volatilities on Investec Emerging and Putnam Multi 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 Investec Emerging with a short position of Putnam Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investec Emerging and Putnam Multi.
Diversification Opportunities for Investec Emerging and Putnam Multi
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Investec and Putnam is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Investec Emerging Markets and Putnam Multi Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Multi Cap and Investec Emerging 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 Investec Emerging Markets are associated (or correlated) with Putnam Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Multi Cap has no effect on the direction of Investec Emerging i.e., Investec Emerging and Putnam Multi go up and down completely randomly.
Pair Corralation between Investec Emerging and Putnam Multi
Assuming the 90 days horizon Investec Emerging Markets is expected to generate 0.63 times more return on investment than Putnam Multi. However, Investec Emerging Markets is 1.59 times less risky than Putnam Multi. It trades about -0.26 of its potential returns per unit of risk. Putnam Multi Cap Growth is currently generating about -0.17 per unit of risk. If you would invest 1,109 in Investec Emerging Markets on October 10, 2024 and sell it today you would lose (35.00) from holding Investec Emerging Markets or give up 3.16% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Investec Emerging Markets vs. Putnam Multi Cap Growth
Performance |
Timeline |
Investec Emerging Markets |
Putnam Multi Cap |
Investec Emerging and Putnam Multi Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Investec Emerging and Putnam Multi
The main advantage of trading using opposite Investec Emerging and Putnam Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investec Emerging position performs unexpectedly, Putnam Multi 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 Putnam Multi will offset losses from the drop in Putnam Multi's long position.Investec Emerging vs. Wilmington Diversified Income | Investec Emerging vs. Adams Diversified Equity | Investec Emerging vs. Delaware Limited Term Diversified | Investec Emerging vs. Stone Ridge Diversified |
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Check out your portfolio center.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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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