Correlation Between Gurtin California and Putnam Convertible
Can any of the company-specific risk be diversified away by investing in both Gurtin California 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 Gurtin California and Putnam Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gurtin California Municipal and Putnam Convertible Securities, you can compare the effects of market volatilities on Gurtin California 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 Gurtin California with a short position of Putnam Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gurtin California and Putnam Convertible.
Diversification Opportunities for Gurtin California and Putnam Convertible
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gurtin and Putnam is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Gurtin California Municipal and Putnam Convertible Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Convertible and Gurtin California 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 Gurtin California Municipal 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 Convertible has no effect on the direction of Gurtin California i.e., Gurtin California and Putnam Convertible go up and down completely randomly.
Pair Corralation between Gurtin California and Putnam Convertible
Assuming the 90 days horizon Gurtin California Municipal is expected to under-perform the Putnam Convertible. But the mutual fund apears to be less risky and, when comparing its historical volatility, Gurtin California Municipal is 2.93 times less risky than Putnam Convertible. The mutual fund trades about -0.12 of its potential returns per unit of risk. The Putnam Convertible Securities is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 2,676 in Putnam Convertible Securities on October 28, 2024 and sell it today you would lose (22.00) from holding Putnam Convertible Securities or give up 0.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gurtin California Municipal vs. Putnam Convertible Securities
Performance |
| Timeline |
| Gurtin California |
| Putnam Convertible |
Gurtin California and Putnam Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gurtin California and Putnam Convertible
The main advantage of trading using opposite Gurtin California and Putnam Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gurtin California 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.| Gurtin California vs. Gurtin California Muni | Gurtin California vs. Gurtin National Muni | Gurtin California vs. Gurtin National Municipal | Gurtin California vs. Rational Special Situations |
| Putnam Convertible vs. Smallcap Fund Fka | Putnam Convertible vs. Ab Small Cap | Putnam Convertible vs. Hunter Small Cap | Putnam Convertible vs. Franklin Small Cap |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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