Correlation Between Putnam Convertible and Mesirow Financial
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Mesirow Financial 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 Mesirow Financial 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 Mesirow Financial Small, you can compare the effects of market volatilities on Putnam Convertible and Mesirow Financial 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 Mesirow Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Mesirow Financial.
Diversification Opportunities for Putnam Convertible and Mesirow Financial
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Putnam and Mesirow is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Securities and Mesirow Financial Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mesirow Financial Small 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 Mesirow Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mesirow Financial Small has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Mesirow Financial go up and down completely randomly.
Pair Corralation between Putnam Convertible and Mesirow Financial
Assuming the 90 days horizon Putnam Convertible Securities is expected to generate 0.44 times more return on investment than Mesirow Financial. However, Putnam Convertible Securities is 2.26 times less risky than Mesirow Financial. It trades about 0.09 of its potential returns per unit of risk. Mesirow Financial Small is currently generating about 0.02 per unit of risk. If you would invest 2,107 in Putnam Convertible Securities on November 9, 2024 and sell it today you would earn a total of 545.00 from holding Putnam Convertible Securities or generate 25.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Convertible Securities vs. Mesirow Financial Small
Performance |
| Timeline |
| Putnam Convertible |
| Mesirow Financial Small |
Putnam Convertible and Mesirow Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and Mesirow Financial
The main advantage of trading using opposite Putnam Convertible and Mesirow Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Mesirow Financial 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 Mesirow Financial will offset losses from the drop in Mesirow Financial's long position.| Putnam Convertible vs. Eventide Healthcare Life | Putnam Convertible vs. Allianzgi Health Sciences | Putnam Convertible vs. The Gabelli Healthcare | Putnam Convertible vs. Baillie Gifford Health |
| Mesirow Financial vs. Fwnhtx | Mesirow Financial vs. Wabmsx | Mesirow Financial vs. Arrow Managed Futures | Mesirow Financial vs. Fkhemx |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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