Correlation Between Putnam Convertible and Tekla Healthcare
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Tekla Healthcare 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 Tekla Healthcare 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 Tekla Healthcare Investors, you can compare the effects of market volatilities on Putnam Convertible and Tekla Healthcare 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 Tekla Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Tekla Healthcare.
Diversification Opportunities for Putnam Convertible and Tekla Healthcare
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Putnam and Tekla is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Vertible Securities and Tekla Healthcare Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tekla Healthcare Inv 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 Tekla Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tekla Healthcare Inv has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Tekla Healthcare go up and down completely randomly.
Pair Corralation between Putnam Convertible and Tekla Healthcare
Assuming the 90 days horizon Putnam Vertible Securities is expected to under-perform the Tekla Healthcare. But the mutual fund apears to be less risky and, when comparing its historical volatility, Putnam Vertible Securities is 1.33 times less risky than Tekla Healthcare. The mutual fund trades about -0.15 of its potential returns per unit of risk. The Tekla Healthcare Investors is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 1,924 in Tekla Healthcare Investors on October 11, 2024 and sell it today you would lose (44.00) from holding Tekla Healthcare Investors or give up 2.29% 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. Tekla Healthcare Investors
Performance |
| Timeline |
| Putnam Vertible Secu |
| Tekla Healthcare Inv |
Putnam Convertible and Tekla Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and Tekla Healthcare
The main advantage of trading using opposite Putnam Convertible and Tekla Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Tekla Healthcare 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 Tekla Healthcare will offset losses from the drop in Tekla Healthcare's 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 |
| Tekla Healthcare vs. Lord Abbett Vertible | Tekla Healthcare vs. Virtus Convertible | Tekla Healthcare vs. Putnam Vertible Securities | Tekla Healthcare vs. Advent Claymore 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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