Correlation Between Putnam Convertible and Templeton Emerging
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Templeton Emerging 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 Templeton Emerging 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 Templeton Emerging Markets, you can compare the effects of market volatilities on Putnam Convertible and Templeton Emerging 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 Templeton Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Templeton Emerging.
Diversification Opportunities for Putnam Convertible and Templeton Emerging
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Putnam and Templeton is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Vertible Securities and Templeton Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Emerging 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 Templeton Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Emerging has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Templeton Emerging go up and down completely randomly.
Pair Corralation between Putnam Convertible and Templeton Emerging
Assuming the 90 days horizon Putnam Vertible Securities is expected to generate 0.98 times more return on investment than Templeton Emerging. However, Putnam Vertible Securities is 1.02 times less risky than Templeton Emerging. It trades about -0.18 of its potential returns per unit of risk. Templeton Emerging Markets is currently generating about -0.32 per unit of risk. If you would invest 2,650 in Putnam Vertible Securities on October 14, 2024 and sell it today you would lose (67.00) from holding Putnam Vertible Securities or give up 2.53% 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. Templeton Emerging Markets
Performance |
| Timeline |
| Putnam Vertible Secu |
| Templeton Emerging |
Putnam Convertible and Templeton Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and Templeton Emerging
The main advantage of trading using opposite Putnam Convertible and Templeton Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Templeton Emerging 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 Templeton Emerging will offset losses from the drop in Templeton Emerging's long position.| Putnam Convertible vs. Dws Government Money | Putnam Convertible vs. Intermediate Government Bond | Putnam Convertible vs. Franklin Adjustable Government | Putnam Convertible vs. Nationwide Government Bond |
| Templeton Emerging vs. Allianzgi Convertible Income | Templeton Emerging vs. Putnam Vertible Securities | Templeton Emerging vs. Gabelli Convertible And | Templeton Emerging vs. Virtus Convertible |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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