Correlation Between Franklin Convertible and Putnam Vertible
Can any of the company-specific risk be diversified away by investing in both Franklin Convertible and Putnam Vertible 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 Franklin Convertible and Putnam Vertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Vertible Securities and Putnam Vertible Securities, you can compare the effects of market volatilities on Franklin Convertible and Putnam Vertible 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 Franklin Convertible with a short position of Putnam Vertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Convertible and Putnam Vertible.
Diversification Opportunities for Franklin Convertible and Putnam Vertible
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Putnam is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Vertible Securities 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 Franklin 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 Franklin Vertible Securities are associated (or correlated) with Putnam Vertible. 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 Franklin Convertible i.e., Franklin Convertible and Putnam Vertible go up and down completely randomly.
Pair Corralation between Franklin Convertible and Putnam Vertible
Assuming the 90 days horizon Franklin Vertible Securities is expected to generate 0.82 times more return on investment than Putnam Vertible. However, Franklin Vertible Securities is 1.22 times less risky than Putnam Vertible. It trades about 0.2 of its potential returns per unit of risk. Putnam Vertible Securities is currently generating about 0.14 per unit of risk. If you would invest 2,325 in Franklin Vertible Securities on November 4, 2024 and sell it today you would earn a total of 47.00 from holding Franklin Vertible Securities or generate 2.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Vertible Securities vs. Putnam Vertible Securities
Performance |
| Timeline |
| Franklin Convertible |
| Putnam Vertible Secu |
Franklin Convertible and Putnam Vertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Convertible and Putnam Vertible
The main advantage of trading using opposite Franklin Convertible and Putnam Vertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Convertible position performs unexpectedly, Putnam Vertible 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 Vertible will offset losses from the drop in Putnam Vertible's long position.| Franklin Convertible vs. Growth Portfolio Class | Franklin Convertible vs. Rational Defensive Growth | Franklin Convertible vs. Calamos Growth Fund | Franklin Convertible vs. Morningstar Growth Etf |
| Putnam Vertible vs. Siit Emerging Markets | Putnam Vertible vs. Vy Jpmorgan Emerging | Putnam Vertible vs. Ashmore Emerging Markets | Putnam Vertible vs. Federated Emerging Market |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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