Correlation Between Goldman Sachs and Putnam Convertible
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs 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 Goldman Sachs and Putnam Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Large and Putnam Convertible Incm Gwth, you can compare the effects of market volatilities on Goldman Sachs 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 Goldman Sachs with a short position of Putnam Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Putnam Convertible.
Diversification Opportunities for Goldman Sachs and Putnam Convertible
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GOLDMAN and Putnam is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Large and Putnam Convertible Incm Gwth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Convertible Incm and Goldman Sachs 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 Goldman Sachs Large 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 Incm has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Putnam Convertible go up and down completely randomly.
Pair Corralation between Goldman Sachs and Putnam Convertible
Assuming the 90 days horizon Goldman Sachs is expected to generate 1.05 times less return on investment than Putnam Convertible. In addition to that, Goldman Sachs is 1.24 times more volatile than Putnam Convertible Incm Gwth. It trades about 0.14 of its total potential returns per unit of risk. Putnam Convertible Incm Gwth is currently generating about 0.18 per unit of volatility. If you would invest 2,300 in Putnam Convertible Incm Gwth on August 26, 2024 and sell it today you would earn a total of 303.00 from holding Putnam Convertible Incm Gwth or generate 13.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Large vs. Putnam Convertible Incm Gwth
Performance |
| Timeline |
| Goldman Sachs Large |
| Putnam Convertible Incm |
Goldman Sachs and Putnam Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Putnam Convertible
The main advantage of trading using opposite Goldman Sachs and Putnam Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs 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.| Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean |
| Putnam Convertible vs. Siit Large Cap | Putnam Convertible vs. Pace Large Growth | Putnam Convertible vs. Alternative Asset Allocation | Putnam Convertible vs. Goldman Sachs Large |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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