Correlation Between Putnam Convertible and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Lord Abbett 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 Lord Abbett 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 Lord Abbett Vertible, you can compare the effects of market volatilities on Putnam Convertible and Lord Abbett 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 Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Lord Abbett.
Diversification Opportunities for Putnam Convertible and Lord Abbett
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Putnam and Lord is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Vertible Securities and Lord Abbett Vertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Vertible 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 Lord Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lord Abbett Vertible has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Lord Abbett go up and down completely randomly.
Pair Corralation between Putnam Convertible and Lord Abbett
Assuming the 90 days horizon Putnam Convertible is expected to generate 1.45 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Putnam Vertible Securities is 1.11 times less risky than Lord Abbett. It trades about 0.13 of its potential returns per unit of risk. Lord Abbett Vertible is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,393 in Lord Abbett Vertible on November 1, 2024 and sell it today you would earn a total of 108.00 from holding Lord Abbett Vertible or generate 7.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.33% |
| Values | Daily Returns |
Putnam Vertible Securities vs. Lord Abbett Vertible
Performance |
| Timeline |
| Putnam Vertible Secu |
| Lord Abbett Vertible |
Putnam Convertible and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and Lord Abbett
The main advantage of trading using opposite Putnam Convertible and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Lord Abbett 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 Lord Abbett will offset losses from the drop in Lord Abbett's long position.| Putnam Convertible vs. Fulcrum Diversified Absolute | Putnam Convertible vs. Lord Abbett Diversified | Putnam Convertible vs. Davenport Small Cap | Putnam Convertible vs. Stone Ridge Diversified |
| Lord Abbett vs. Allianzgi Convertible Income | Lord Abbett vs. Gabelli Convertible And | Lord Abbett vs. Rationalpier 88 Convertible | Lord Abbett vs. Allianzgi Convertible Income |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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