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 Convertible Securities and Lord Abbett Focused, 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
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Putnam and Lord is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Securities and Lord Abbett Focused in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Focused 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 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 Focused 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 Securities is expected to generate 0.81 times more return on investment than Lord Abbett. However, Putnam Convertible Securities is 1.24 times less risky than Lord Abbett. It trades about 0.13 of its potential returns per unit of risk. Lord Abbett Focused is currently generating about 0.08 per unit of risk. If you would invest 2,503 in Putnam Convertible Securities on October 24, 2024 and sell it today you would earn a total of 153.00 from holding Putnam Convertible Securities or generate 6.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Convertible Securities vs. Lord Abbett Focused
Performance |
| Timeline |
| Putnam Convertible |
| Lord Abbett Focused |
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. Ab High Income | Putnam Convertible vs. Artisan High Income | Putnam Convertible vs. Barings High Yield | Putnam Convertible vs. Prudential High Yield |
| Lord Abbett vs. Allianzgi Convertible Income | Lord Abbett vs. Rationalpier 88 Convertible | Lord Abbett vs. Columbia Convertible Securities | Lord Abbett vs. Putnam Convertible Securities |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |