Correlation Between Voya High and Putnam Convertible
Can any of the company-specific risk be diversified away by investing in both Voya High 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 Voya High and Putnam Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya High Yield and Putnam Vertible Securities, you can compare the effects of market volatilities on Voya High 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 Voya High with a short position of Putnam Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya High and Putnam Convertible.
Diversification Opportunities for Voya High and Putnam Convertible
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Voya and Putnam is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Voya High Yield 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 Voya High 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 Voya High Yield 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 Voya High i.e., Voya High and Putnam Convertible go up and down completely randomly.
Pair Corralation between Voya High and Putnam Convertible
Assuming the 90 days horizon Voya High is expected to generate 5.68 times less return on investment than Putnam Convertible. But when comparing it to its historical volatility, Voya High Yield is 3.78 times less risky than Putnam Convertible. It trades about 0.17 of its potential returns per unit of risk. Putnam Vertible Securities is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 2,571 in Putnam Vertible Securities on November 2, 2024 and sell it today you would earn a total of 84.00 from holding Putnam Vertible Securities or generate 3.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya High Yield vs. Putnam Vertible Securities
Performance |
| Timeline |
| Voya High Yield |
| Putnam Vertible Secu |
Voya High and Putnam Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya High and Putnam Convertible
The main advantage of trading using opposite Voya High and Putnam Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya High 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.| Voya High vs. Invesco Technology Fund | Voya High vs. Dreyfus Technology Growth | Voya High vs. Towpath Technology | Voya High vs. Columbia Global Technology |
| Putnam Convertible vs. Fulcrum Diversified Absolute | Putnam Convertible vs. Lord Abbett Diversified | Putnam Convertible vs. Davenport Small Cap | Putnam Convertible vs. Stone Ridge Diversified |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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