Correlation Between Putnam Convertible and Bny Mellon
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Bny Mellon 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 Bny Mellon 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 Bny Mellon Income, you can compare the effects of market volatilities on Putnam Convertible and Bny Mellon 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 Bny Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Bny Mellon.
Diversification Opportunities for Putnam Convertible and Bny Mellon
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Putnam and Bny is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Incm Gwth and Bny Mellon Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bny Mellon 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 Convertible Incm Gwth are associated (or correlated) with Bny Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bny Mellon Income has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Bny Mellon go up and down completely randomly.
Pair Corralation between Putnam Convertible and Bny Mellon
Assuming the 90 days horizon Putnam Convertible is expected to generate 1.03 times less return on investment than Bny Mellon. But when comparing it to its historical volatility, Putnam Convertible Incm Gwth is 1.27 times less risky than Bny Mellon. It trades about 0.2 of its potential returns per unit of risk. Bny Mellon Income is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 764.00 in Bny Mellon Income on September 1, 2024 and sell it today you would earn a total of 116.00 from holding Bny Mellon Income or generate 15.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Putnam Convertible Incm Gwth vs. Bny Mellon Income
Performance |
| Timeline |
| Putnam Convertible Incm |
| Bny Mellon Income |
Putnam Convertible and Bny Mellon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and Bny Mellon
The main advantage of trading using opposite Putnam Convertible and Bny Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Bny Mellon 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 Bny Mellon will offset losses from the drop in Bny Mellon's long position.| Putnam Convertible vs. Putnam Equity Income | Putnam Convertible vs. Putnam Tax Exempt | Putnam Convertible vs. Putnam Floating Rate | Putnam Convertible vs. Putnam Floating Rate |
| Bny Mellon vs. Columbia Vertible Securities | Bny Mellon vs. Advent Claymore Convertible | Bny Mellon vs. Lord Abbett Convertible | Bny Mellon vs. Putnam Convertible Incm Gwth |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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