Correlation Between Artisan Small and Putnam Convertible
Can any of the company-specific risk be diversified away by investing in both Artisan Small 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 Small 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 Small Cap and Putnam Convertible Incm Gwth, you can compare the effects of market volatilities on Artisan Small 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 Small with a short position of Putnam Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Small and Putnam Convertible.
Diversification Opportunities for Artisan Small and Putnam Convertible
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Artisan and Putnam is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Small Cap and Putnam Convertible Incm Gwth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Convertible Incm and Artisan Small 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 Small Cap 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 Incm has no effect on the direction of Artisan Small i.e., Artisan Small and Putnam Convertible go up and down completely randomly.
Pair Corralation between Artisan Small and Putnam Convertible
Assuming the 90 days horizon Artisan Small Cap is expected to generate 1.68 times more return on investment than Putnam Convertible. However, Artisan Small is 1.68 times more volatile than Putnam Convertible Incm Gwth. It trades about -0.14 of its potential returns per unit of risk. Putnam Convertible Incm Gwth is currently generating about -0.26 per unit of risk. If you would invest 3,719 in Artisan Small Cap on October 13, 2024 and sell it today you would lose (134.00) from holding Artisan Small Cap or give up 3.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Artisan Small Cap vs. Putnam Convertible Incm Gwth
Performance |
| Timeline |
| Artisan Small Cap |
| Putnam Convertible Incm |
Artisan Small and Putnam Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artisan Small and Putnam Convertible
The main advantage of trading using opposite Artisan Small and Putnam Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Small 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 Small vs. Artisan Global Opportunities | Artisan Small vs. Artisan Mid Cap | Artisan Small vs. Wasatch Ultra Growth | Artisan Small vs. Artisan International Value |
| Putnam Convertible vs. Putnam Multi Cap Growth | Putnam Convertible vs. Putnam Multi Cap Growth | Putnam Convertible vs. Putnam Sustainable Future | Putnam Convertible vs. Putnam Equity Income |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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