Correlation Between Putnam Convertible and Putnam Equity
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Putnam Equity 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 Putnam Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Vertible Securities and Putnam Equity Income, you can compare the effects of market volatilities on Putnam Convertible and Putnam Equity 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 Putnam Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Putnam Equity.
Diversification Opportunities for Putnam Convertible and Putnam Equity
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Putnam and Putnam is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Vertible Securities and Putnam Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Equity Income 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 Vertible Securities are associated (or correlated) with Putnam Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Equity Income has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Putnam Equity go up and down completely randomly.
Pair Corralation between Putnam Convertible and Putnam Equity
Assuming the 90 days horizon Putnam Convertible is expected to generate 1.5 times less return on investment than Putnam Equity. But when comparing it to its historical volatility, Putnam Vertible Securities is 1.28 times less risky than Putnam Equity. It trades about 0.11 of its potential returns per unit of risk. Putnam Equity Income is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,861 in Putnam Equity Income on September 1, 2024 and sell it today you would earn a total of 1,033 from holding Putnam Equity Income or generate 36.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Vertible Securities vs. Putnam Equity Income
Performance |
| Timeline |
| Putnam Vertible Secu |
| Putnam Equity Income |
Putnam Convertible and Putnam Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and Putnam Equity
The main advantage of trading using opposite Putnam Convertible and Putnam Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Putnam Equity 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 Putnam Equity will offset losses from the drop in Putnam Equity's long position.| Putnam Convertible vs. Western Asset Municipal | Putnam Convertible vs. Falcon Focus Scv | Putnam Convertible vs. Leggmason Partners Institutional | Putnam Convertible vs. Abr 7525 Volatility |
| Putnam Equity vs. Putnam Growth Opportunities | Putnam Equity vs. Putnam International Equity | Putnam Equity vs. George Putnam Fund | Putnam Equity vs. Putnam Multi Cap Growth |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |