Correlation Between Putnam Convertible and Equity Growth
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Equity Growth 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 Equity Growth 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 The Equity Growth, you can compare the effects of market volatilities on Putnam Convertible and Equity Growth 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 Equity Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Equity Growth.
Diversification Opportunities for Putnam Convertible and Equity Growth
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Putnam and Equity is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Incm Gwth and The Equity Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equity Growth 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 Equity Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equity Growth has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Equity Growth go up and down completely randomly.
Pair Corralation between Putnam Convertible and Equity Growth
Assuming the 90 days horizon Putnam Convertible is expected to generate 5.96 times less return on investment than Equity Growth. But when comparing it to its historical volatility, Putnam Convertible Incm Gwth is 5.57 times less risky than Equity Growth. It trades about 0.11 of its potential returns per unit of risk. The Equity Growth is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,686 in The Equity Growth on September 14, 2024 and sell it today you would earn a total of 181.00 from holding The Equity Growth or generate 6.74% 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. The Equity Growth
Performance |
| Timeline |
| Putnam Convertible Incm |
| Equity Growth |
Putnam Convertible and Equity Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and Equity Growth
The main advantage of trading using opposite Putnam Convertible and Equity Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Equity Growth 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 Equity Growth will offset losses from the drop in Equity Growth's long position.| Putnam Convertible vs. Gamco Natural Resources | Putnam Convertible vs. Alpsalerian Energy Infrastructure | Putnam Convertible vs. Oil Gas Ultrasector | Putnam Convertible vs. Energy Basic Materials |
| Equity Growth vs. Virtus Convertible | Equity Growth vs. Absolute Convertible Arbitrage | Equity Growth vs. Putnam Convertible Incm Gwth | Equity Growth vs. Allianzgi Convertible Income |
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
| Transaction History View history of all your transactions and understand their impact on performance | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |