Correlation Between Astar and Putnam Convertible
Can any of the company-specific risk be diversified away by investing in both Astar 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 Astar and Putnam Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and Putnam Vertible Securities, you can compare the effects of market volatilities on Astar 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 Astar with a short position of Putnam Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and Putnam Convertible.
Diversification Opportunities for Astar and Putnam Convertible
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Astar and Putnam is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Putnam Vertible Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Vertible Secu and Astar 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 Astar 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 Vertible Secu has no effect on the direction of Astar i.e., Astar and Putnam Convertible go up and down completely randomly.
Pair Corralation between Astar and Putnam Convertible
Assuming the 90 days trading horizon Astar is expected to under-perform the Putnam Convertible. In addition to that, Astar is 7.1 times more volatile than Putnam Vertible Securities. It trades about -0.15 of its total potential returns per unit of risk. Putnam Vertible Securities is currently generating about -0.15 per unit of volatility. If you would invest 2,644 in Putnam Vertible Securities on October 11, 2024 and sell it today you would lose (61.00) from holding Putnam Vertible Securities or give up 2.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Astar vs. Putnam Vertible Securities
Performance |
| Timeline |
| Astar |
| Putnam Vertible Secu |
Astar and Putnam Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and Putnam Convertible
The main advantage of trading using opposite Astar and Putnam Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar 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.The idea behind Astar and Putnam Vertible Securities 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.| Putnam Convertible vs. Small Cap Value Fund | Putnam Convertible vs. Amg River Road | Putnam Convertible vs. Ultrasmall Cap Profund Ultrasmall Cap | Putnam Convertible vs. Lord Abbett Small |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |