Correlation Between T Rowe and George Putnam

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

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

Diversification Opportunities for T Rowe and George Putnam

0.0

Correlation Coefficient

T Rowe  George Putnam

Pay attention - limited upside

The 3 months correlation between PRINX and George is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding T Rowe Price and George Putnam Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on George Putnam and T Rowe 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 T Rowe Price 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 T Rowe i.e., T Rowe and George Putnam go up and down completely randomly.

Pair Corralation between T Rowe and George Putnam

If you would invest  2,523  in George Putnam Fund on September 15, 2024 and sell it today you would earn a total of  0.00  from holding George Putnam Fund 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

T Rowe Price  vs.  George Putnam Fund

T Rowe Price

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days T Rowe Price has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, T Rowe 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 fundamental drivers, 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 T Rowe and George Putnam

The main advantage of trading using opposite T Rowe and George Putnam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Rowe 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 T Rowe Price 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.