Correlation Between Ftfa-franklin Templeton and Putnam Convertible
Can any of the company-specific risk be diversified away by investing in both Ftfa-franklin Templeton 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 Ftfa-franklin Templeton and Putnam Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ftfa Franklin Templeton Growth and Putnam Vertible Securities, you can compare the effects of market volatilities on Ftfa-franklin Templeton 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 Ftfa-franklin Templeton with a short position of Putnam Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ftfa-franklin Templeton and Putnam Convertible.
Diversification Opportunities for Ftfa-franklin Templeton and Putnam Convertible
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ftfa-franklin and Putnam is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Ftfa Franklin Templeton Growth 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 Ftfa-franklin Templeton 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 Ftfa Franklin Templeton Growth 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 Ftfa-franklin Templeton i.e., Ftfa-franklin Templeton and Putnam Convertible go up and down completely randomly.
Pair Corralation between Ftfa-franklin Templeton and Putnam Convertible
Assuming the 90 days horizon Ftfa Franklin Templeton Growth is expected to generate 0.99 times more return on investment than Putnam Convertible. However, Ftfa Franklin Templeton Growth is 1.01 times less risky than Putnam Convertible. It trades about -0.03 of its potential returns per unit of risk. Putnam Vertible Securities is currently generating about -0.06 per unit of risk. If you would invest 2,100 in Ftfa Franklin Templeton Growth on October 30, 2024 and sell it today you would lose (17.00) from holding Ftfa Franklin Templeton Growth or give up 0.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.44% |
| Values | Daily Returns |
Ftfa Franklin Templeton Growth vs. Putnam Vertible Securities
Performance |
| Timeline |
| Ftfa Franklin Templeton |
| Putnam Vertible Secu |
Ftfa-franklin Templeton and Putnam Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ftfa-franklin Templeton and Putnam Convertible
The main advantage of trading using opposite Ftfa-franklin Templeton and Putnam Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ftfa-franklin Templeton 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 Ftfa Franklin Templeton Growth 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.
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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