Correlation Between Artisan High and Putnam Convertible
Can any of the company-specific risk be diversified away by investing in both Artisan High and Putnam Convertible 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 Artisan High and Putnam Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Artisan High Income and Putnam Convertible Securities, you can compare the effects of market volatilities on Artisan High and Putnam Convertible 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 Artisan High with a short position of Putnam Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan High and Putnam Convertible.
Diversification Opportunities for Artisan High and Putnam Convertible
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Artisan and Putnam is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Artisan High Income and Putnam Convertible Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Convertible and Artisan High 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 Artisan High Income are associated (or correlated) with Putnam Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Convertible has no effect on the direction of Artisan High i.e., Artisan High and Putnam Convertible go up and down completely randomly.
Pair Corralation between Artisan High and Putnam Convertible
Assuming the 90 days horizon Artisan High is expected to generate 2.34 times less return on investment than Putnam Convertible. But when comparing it to its historical volatility, Artisan High Income is 3.62 times less risky than Putnam Convertible. It trades about 0.29 of its potential returns per unit of risk. Putnam Convertible Securities is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,596 in Putnam Convertible Securities on October 24, 2024 and sell it today you would earn a total of 60.00 from holding Putnam Convertible Securities or generate 2.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Artisan High Income vs. Putnam Convertible Securities
Performance |
| Timeline |
| Artisan High Income |
| Putnam Convertible |
Artisan High and Putnam Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artisan High and Putnam Convertible
The main advantage of trading using opposite Artisan High and Putnam Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan High position performs unexpectedly, Putnam Convertible 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 Convertible will offset losses from the drop in Putnam Convertible's long position.| Artisan High vs. Nuveen Strategic Municipal | Artisan High vs. T Rowe Price | Artisan High vs. Morningstar Municipal Bond | Artisan High vs. Ab Municipal Bond |
| Putnam Convertible vs. Ab High Income | Putnam Convertible vs. Artisan High Income | Putnam Convertible vs. Barings High Yield | Putnam Convertible vs. Prudential High Yield |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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