Correlation Between Putnam Convertible and World Energy
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and World Energy 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 World Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Convertible Incm Gwth and World Energy Fund, you can compare the effects of market volatilities on Putnam Convertible and World Energy 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 World Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and World Energy.
Diversification Opportunities for Putnam Convertible and World Energy
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Putnam and World is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Incm Gwth and World Energy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Energy 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 Incm Gwth are associated (or correlated) with World Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Energy has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and World Energy go up and down completely randomly.
Pair Corralation between Putnam Convertible and World Energy
Assuming the 90 days horizon Putnam Convertible Incm Gwth is expected to generate 0.46 times more return on investment than World Energy. However, Putnam Convertible Incm Gwth is 2.2 times less risky than World Energy. It trades about 0.09 of its potential returns per unit of risk. World Energy Fund is currently generating about 0.02 per unit of risk. If you would invest 2,573 in Putnam Convertible Incm Gwth on September 13, 2024 and sell it today you would earn a total of 26.00 from holding Putnam Convertible Incm Gwth or generate 1.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Convertible Incm Gwth vs. World Energy Fund
Performance |
| Timeline |
| Putnam Convertible Incm |
| World Energy |
Putnam Convertible and World Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and World Energy
The main advantage of trading using opposite Putnam Convertible and World Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, World Energy 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 World Energy will offset losses from the drop in World Energy's long position.| Putnam Convertible vs. Legg Mason Global | Putnam Convertible vs. Scharf Global Opportunity | Putnam Convertible vs. Siit Global Managed | Putnam Convertible vs. Ab Global Risk |
| World Energy vs. Hennessy Bp Energy | World Energy vs. Franklin Natural Resources | World Energy vs. Icon Natural Resources | World Energy vs. Gamco Natural Resources |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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