Correlation Between Putnam Convertible and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Ashmore Emerging 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 Ashmore Emerging 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 Ashmore Emerging Markets, you can compare the effects of market volatilities on Putnam Convertible and Ashmore Emerging 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 Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Ashmore Emerging.
Diversification Opportunities for Putnam Convertible and Ashmore Emerging
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Putnam and Ashmore is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Incm Gwth and Ashmore Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashmore Emerging Markets 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 Ashmore Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashmore Emerging Markets has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Putnam Convertible and Ashmore Emerging
Assuming the 90 days horizon Putnam Convertible Incm Gwth is expected to generate 0.47 times more return on investment than Ashmore Emerging. However, Putnam Convertible Incm Gwth is 2.13 times less risky than Ashmore Emerging. It trades about 0.2 of its potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.03 per unit of risk. If you would invest 2,287 in Putnam Convertible Incm Gwth on September 1, 2024 and sell it today you would earn a total of 338.00 from holding Putnam Convertible Incm Gwth or generate 14.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Convertible Incm Gwth vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Putnam Convertible Incm |
| Ashmore Emerging Markets |
Putnam Convertible and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and Ashmore Emerging
The main advantage of trading using opposite Putnam Convertible and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Ashmore Emerging 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 Ashmore Emerging will offset losses from the drop in Ashmore Emerging'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 |
| Ashmore Emerging vs. Mesirow Financial Small | Ashmore Emerging vs. John Hancock Financial | Ashmore Emerging vs. Angel Oak Financial | Ashmore Emerging vs. Davis Financial Fund |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |