Correlation Between Putnam Convertible and Gurtin California
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Gurtin California 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 Gurtin California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Convertible Securities and Gurtin California Municipal, you can compare the effects of market volatilities on Putnam Convertible and Gurtin California 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 Gurtin California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Gurtin California.
Diversification Opportunities for Putnam Convertible and Gurtin California
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Putnam and Gurtin is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Securities and Gurtin California Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gurtin California 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 Convertible Securities are associated (or correlated) with Gurtin California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gurtin California has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Gurtin California go up and down completely randomly.
Pair Corralation between Putnam Convertible and Gurtin California
Assuming the 90 days horizon Putnam Convertible Securities is expected to generate 2.72 times more return on investment than Gurtin California. However, Putnam Convertible is 2.72 times more volatile than Gurtin California Municipal. It trades about 0.08 of its potential returns per unit of risk. Gurtin California Municipal is currently generating about 0.06 per unit of risk. If you would invest 2,163 in Putnam Convertible Securities on November 6, 2024 and sell it today you would earn a total of 494.00 from holding Putnam Convertible Securities or generate 22.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Putnam Convertible Securities vs. Gurtin California Municipal
Performance |
| Timeline |
| Putnam Convertible |
| Gurtin California |
Putnam Convertible and Gurtin California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and Gurtin California
The main advantage of trading using opposite Putnam Convertible and Gurtin California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Gurtin California 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 Gurtin California will offset losses from the drop in Gurtin California's long position.| Putnam Convertible vs. Rationalpier 88 Convertible | Putnam Convertible vs. Calamos Dynamic Convertible | Putnam Convertible vs. Advent Claymore Convertible | Putnam Convertible vs. Fidelity Sai Convertible |
| Gurtin California vs. Gurtin California Muni | Gurtin California vs. Gurtin National Muni | Gurtin California vs. Gurtin National Municipal | Gurtin California vs. Payden Strategic 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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