Correlation Between Putnam Convertible and Advent Claymore
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Advent Claymore 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 Advent Claymore 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 Advent Claymore Convertible, you can compare the effects of market volatilities on Putnam Convertible and Advent Claymore 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 Advent Claymore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Advent Claymore.
Diversification Opportunities for Putnam Convertible and Advent Claymore
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Putnam and Advent is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Securities and Advent Claymore Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advent Claymore Conv 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 Advent Claymore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advent Claymore Conv has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Advent Claymore go up and down completely randomly.
Pair Corralation between Putnam Convertible and Advent Claymore
Assuming the 90 days horizon Putnam Convertible Securities is expected to generate 0.84 times more return on investment than Advent Claymore. However, Putnam Convertible Securities is 1.19 times less risky than Advent Claymore. It trades about 0.11 of its potential returns per unit of risk. Advent Claymore Convertible is currently generating about 0.01 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 Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Putnam Convertible Securities vs. Advent Claymore Convertible
Performance |
| Timeline |
| Putnam Convertible |
| Advent Claymore Conv |
Putnam Convertible and Advent Claymore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and Advent Claymore
The main advantage of trading using opposite Putnam Convertible and Advent Claymore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Advent Claymore 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 Advent Claymore will offset losses from the drop in Advent Claymore'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 |
| Advent Claymore vs. Tiaa Cref Large Cap Value | Advent Claymore vs. Fisher Large Cap | Advent Claymore vs. Qs Large Cap | Advent Claymore vs. Guidemark Large Cap |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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