Correlation Between Putnam Convertible and Baird Smallmid
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Baird Smallmid 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 Putnam Convertible and Baird Smallmid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Vertible Securities and Baird Smallmid Cap, you can compare the effects of market volatilities on Putnam Convertible and Baird Smallmid 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 Putnam Convertible with a short position of Baird Smallmid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Baird Smallmid.
Diversification Opportunities for Putnam Convertible and Baird Smallmid
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Putnam and Baird is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Vertible Securities and Baird Smallmid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baird Smallmid Cap and Putnam Convertible 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 Putnam Vertible Securities are associated (or correlated) with Baird Smallmid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baird Smallmid Cap has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Baird Smallmid go up and down completely randomly.
Pair Corralation between Putnam Convertible and Baird Smallmid
Assuming the 90 days horizon Putnam Vertible Securities is expected to generate 0.76 times more return on investment than Baird Smallmid. However, Putnam Vertible Securities is 1.32 times less risky than Baird Smallmid. It trades about -0.11 of its potential returns per unit of risk. Baird Smallmid Cap is currently generating about -0.19 per unit of risk. If you would invest 2,655 in Putnam Vertible Securities on October 10, 2024 and sell it today you would lose (48.00) from holding Putnam Vertible Securities or give up 1.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Putnam Vertible Securities vs. Baird Smallmid Cap
Performance |
| Timeline |
| Putnam Vertible Secu |
| Baird Smallmid Cap |
Putnam Convertible and Baird Smallmid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and Baird Smallmid
The main advantage of trading using opposite Putnam Convertible and Baird Smallmid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Baird Smallmid 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 Baird Smallmid will offset losses from the drop in Baird Smallmid's long position.| Putnam Convertible vs. Mutual Of America | Putnam Convertible vs. Great West Loomis Sayles | Putnam Convertible vs. Amg River Road | Putnam Convertible vs. Fpa Queens Road |
| Baird Smallmid vs. Small Pany Growth | Baird Smallmid vs. Eic Value Fund | Baird Smallmid vs. Arrow Managed Futures | Baird Smallmid vs. Fmasx |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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