Correlation Between Franklin Adjustable and Putnam Equity
Can any of the company-specific risk be diversified away by investing in both Franklin Adjustable and Putnam Equity 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 Adjustable and Putnam Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Adjustable Government and Putnam Equity Income, you can compare the effects of market volatilities on Franklin Adjustable and Putnam Equity 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 Adjustable with a short position of Putnam Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Adjustable and Putnam Equity.
Diversification Opportunities for Franklin Adjustable and Putnam Equity
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between FRANKLIN and Putnam is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Adjustable Government and Putnam Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Equity Income and Franklin Adjustable 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 Adjustable Government are associated (or correlated) with Putnam Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Equity Income has no effect on the direction of Franklin Adjustable i.e., Franklin Adjustable and Putnam Equity go up and down completely randomly.
Pair Corralation between Franklin Adjustable and Putnam Equity
Assuming the 90 days horizon Franklin Adjustable Government is expected to under-perform the Putnam Equity. But the mutual fund apears to be less risky and, when comparing its historical volatility, Franklin Adjustable Government is 8.6 times less risky than Putnam Equity. The mutual fund trades about -0.08 of its potential returns per unit of risk. The Putnam Equity Income is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 3,696 in Putnam Equity Income on September 1, 2024 and sell it today you would earn a total of 200.00 from holding Putnam Equity Income or generate 5.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Franklin Adjustable Government vs. Putnam Equity Income
Performance |
| Timeline |
| Franklin Adjustable |
| Putnam Equity Income |
Franklin Adjustable and Putnam Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Adjustable and Putnam Equity
The main advantage of trading using opposite Franklin Adjustable and Putnam Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Adjustable position performs unexpectedly, Putnam Equity 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 Equity will offset losses from the drop in Putnam Equity's long position.| Franklin Adjustable vs. Virtus Seix Government | Franklin Adjustable vs. Dws Government Money | Franklin Adjustable vs. Dunham Porategovernment Bond | Franklin Adjustable vs. Ab Government Exchange |
| Putnam Equity vs. Touchstone Small Cap | Putnam Equity vs. Ab Small Cap | Putnam Equity vs. Champlain Mid Cap | Putnam Equity vs. Growth Opportunities Fund |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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