Correlation Between Putnam Convertible and International Investors
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and International Investors 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 International Investors 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 International Investors Gold, you can compare the effects of market volatilities on Putnam Convertible and International Investors 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 International Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and International Investors.
Diversification Opportunities for Putnam Convertible and International Investors
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Putnam and International is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Vertible Securities and International Investors Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Investors 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 International Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Investors has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and International Investors go up and down completely randomly.
Pair Corralation between Putnam Convertible and International Investors
Assuming the 90 days horizon Putnam Vertible Securities is expected to generate 0.38 times more return on investment than International Investors. However, Putnam Vertible Securities is 2.6 times less risky than International Investors. It trades about -0.15 of its potential returns per unit of risk. International Investors Gold is currently generating about -0.07 per unit of risk. If you would invest 2,644 in Putnam Vertible Securities on October 11, 2024 and sell it today you would lose (61.00) from holding Putnam Vertible Securities or give up 2.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Vertible Securities vs. International Investors Gold
Performance |
| Timeline |
| Putnam Vertible Secu |
| International Investors |
Putnam Convertible and International Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and International Investors
The main advantage of trading using opposite Putnam Convertible and International Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, International Investors 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 International Investors will offset losses from the drop in International Investors' long position.| Putnam Convertible vs. Small Cap Value Fund | Putnam Convertible vs. Amg River Road | Putnam Convertible vs. Ultrasmall Cap Profund Ultrasmall Cap | Putnam Convertible vs. Lord Abbett Small |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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