Correlation Between Putnam Convertible and Payden Absolute
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Payden Absolute 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 Payden Absolute 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 Payden Absolute Return, you can compare the effects of market volatilities on Putnam Convertible and Payden Absolute 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 Payden Absolute. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Payden Absolute.
Diversification Opportunities for Putnam Convertible and Payden Absolute
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Putnam and Payden is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Securities and Payden Absolute Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Absolute Return 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 Payden Absolute. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Absolute Return has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Payden Absolute go up and down completely randomly.
Pair Corralation between Putnam Convertible and Payden Absolute
Assuming the 90 days horizon Putnam Convertible Securities is expected to generate 7.11 times more return on investment than Payden Absolute. However, Putnam Convertible is 7.11 times more volatile than Payden Absolute Return. It trades about 0.11 of its potential returns per unit of risk. Payden Absolute Return is currently generating about 0.32 per unit of risk. If you would invest 2,277 in Putnam Convertible Securities on November 3, 2024 and sell it today you would earn a total of 380.00 from holding Putnam Convertible Securities or generate 16.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Convertible Securities vs. Payden Absolute Return
Performance |
| Timeline |
| Putnam Convertible |
| Payden Absolute Return |
Putnam Convertible and Payden Absolute Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and Payden Absolute
The main advantage of trading using opposite Putnam Convertible and Payden Absolute positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Payden Absolute 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 Payden Absolute will offset losses from the drop in Payden Absolute's long position.| Putnam Convertible vs. Salient Mlp Energy | Putnam Convertible vs. Short Oil Gas | Putnam Convertible vs. Thrivent Natural Resources | Putnam Convertible vs. Clearbridge Energy Mlp |
| Payden Absolute vs. Columbia Real Estate | Payden Absolute vs. Neuberger Berman Real | Payden Absolute vs. Nexpoint Real Estate | Payden Absolute vs. Rreef Property Trust |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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