Correlation Between Columbia Convertible and Putnam Floating
Can any of the company-specific risk be diversified away by investing in both Columbia Convertible and Putnam Floating 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 Columbia Convertible and Putnam Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Vertible Securities and Putnam Floating Rate, you can compare the effects of market volatilities on Columbia Convertible and Putnam Floating 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 Columbia Convertible with a short position of Putnam Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Convertible and Putnam Floating.
Diversification Opportunities for Columbia Convertible and Putnam Floating
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Columbia and Putnam is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Vertible Securities and Putnam Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Floating Rate and Columbia Convertible 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 Columbia Vertible Securities are associated (or correlated) with Putnam Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Floating Rate has no effect on the direction of Columbia Convertible i.e., Columbia Convertible and Putnam Floating go up and down completely randomly.
Pair Corralation between Columbia Convertible and Putnam Floating
Assuming the 90 days horizon Columbia Vertible Securities is expected to generate 3.44 times more return on investment than Putnam Floating. However, Columbia Convertible is 3.44 times more volatile than Putnam Floating Rate. It trades about 0.19 of its potential returns per unit of risk. Putnam Floating Rate is currently generating about 0.16 per unit of risk. If you would invest 2,064 in Columbia Vertible Securities on September 2, 2024 and sell it today you would earn a total of 270.00 from holding Columbia Vertible Securities or generate 13.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Vertible Securities vs. Putnam Floating Rate
Performance |
| Timeline |
| Columbia Convertible |
| Putnam Floating Rate |
Columbia Convertible and Putnam Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Convertible and Putnam Floating
The main advantage of trading using opposite Columbia Convertible and Putnam Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Convertible position performs unexpectedly, Putnam Floating 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 Floating will offset losses from the drop in Putnam Floating's long position.| Columbia Convertible vs. Legg Mason Partners | Columbia Convertible vs. Qs Small Capitalization | Columbia Convertible vs. Small Pany Growth | Columbia Convertible vs. Baird Smallmid Cap |
| Putnam Floating vs. Putnam Equity Income | Putnam Floating vs. Putnam Tax Exempt | Putnam Floating vs. Putnam High Yield | Putnam Floating vs. Putnam Floating Rate |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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