Correlation Between Goldman Sachs and George Putnam

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Can any of the company-specific risk be diversified away by investing in both Goldman Sachs 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 Goldman Sachs and George Putnam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Managed and George Putnam Fund, you can compare the effects of market volatilities on Goldman Sachs 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 Goldman Sachs with a short position of George Putnam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and George Putnam.

Diversification Opportunities for Goldman Sachs and George Putnam

-0.36
  Correlation Coefficient

Very good diversification

The 3 months correlation between GOLDMAN and George is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Managed and George Putnam Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on George Putnam and Goldman Sachs 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 Goldman Sachs Managed 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 Goldman Sachs i.e., Goldman Sachs and George Putnam go up and down completely randomly.

Pair Corralation between Goldman Sachs and George Putnam

Assuming the 90 days horizon Goldman Sachs Managed is expected to generate 0.7 times more return on investment than George Putnam. However, Goldman Sachs Managed is 1.42 times less risky than George Putnam. It trades about 0.25 of its potential returns per unit of risk. George Putnam Fund is currently generating about 0.03 per unit of risk. If you would invest  908.00  in Goldman Sachs Managed on September 5, 2024 and sell it today you would earn a total of  30.00  from holding Goldman Sachs Managed or generate 3.3% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Goldman Sachs Managed  vs.  George Putnam Fund

 Performance 
       Timeline  
Goldman Sachs Managed 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Goldman Sachs Managed has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Goldman Sachs 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

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in George Putnam Fund are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. 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.

Goldman Sachs and George Putnam Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Goldman Sachs and George Putnam

The main advantage of trading using opposite Goldman Sachs and George Putnam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs 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 Goldman Sachs Managed 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

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