Correlation Between Core Bond and Putnam Convertible
Can any of the company-specific risk be diversified away by investing in both Core Bond 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 Core Bond and Putnam Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Core Bond Fund and Putnam Convertible Incm Gwth, you can compare the effects of market volatilities on Core Bond 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 Core Bond with a short position of Putnam Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Core Bond and Putnam Convertible.
Diversification Opportunities for Core Bond and Putnam Convertible
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Core and Putnam is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Core Bond Fund 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 Core Bond 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 Core Bond Fund 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 Core Bond i.e., Core Bond and Putnam Convertible go up and down completely randomly.
Pair Corralation between Core Bond and Putnam Convertible
Assuming the 90 days horizon Core Bond Fund is expected to generate 0.51 times more return on investment than Putnam Convertible. However, Core Bond Fund is 1.97 times less risky than Putnam Convertible. It trades about -0.38 of its potential returns per unit of risk. Putnam Convertible Incm Gwth is currently generating about -0.19 per unit of risk. If you would invest 1,104 in Core Bond Fund on September 28, 2024 and sell it today you would lose (29.00) from holding Core Bond Fund or give up 2.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Core Bond Fund vs. Putnam Convertible Incm Gwth
Performance |
| Timeline |
| Core Bond Fund |
| Putnam Convertible Incm |
Core Bond and Putnam Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Core Bond and Putnam Convertible
The main advantage of trading using opposite Core Bond and Putnam Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Core Bond 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.| Core Bond vs. Putnam Convertible Incm Gwth | Core Bond vs. Allianzgi Convertible Income | Core Bond vs. Fidelity Sai Convertible | Core Bond vs. Advent Claymore Convertible |
| Putnam Convertible vs. Intermediate Government Bond | Putnam Convertible vs. Ridgeworth Seix Government | Putnam Convertible vs. Hsbc Government Money | Putnam Convertible vs. Dreyfus Government Cash |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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