Correlation Between Putnam Convertible and Franklin Founding
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Franklin Founding 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 Franklin Founding 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 Franklin Founding Funds, you can compare the effects of market volatilities on Putnam Convertible and Franklin Founding 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 Franklin Founding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Franklin Founding.
Diversification Opportunities for Putnam Convertible and Franklin Founding
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Putnam and Franklin is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Incm Gwth and Franklin Founding Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Founding Funds 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 Franklin Founding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Founding Funds has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Franklin Founding go up and down completely randomly.
Pair Corralation between Putnam Convertible and Franklin Founding
Assuming the 90 days horizon Putnam Convertible is expected to generate 1.36 times less return on investment than Franklin Founding. In addition to that, Putnam Convertible is 1.61 times more volatile than Franklin Founding Funds. It trades about 0.09 of its total potential returns per unit of risk. Franklin Founding Funds is currently generating about 0.21 per unit of volatility. If you would invest 1,566 in Franklin Founding Funds on September 13, 2024 and sell it today you would earn a total of 22.00 from holding Franklin Founding Funds or generate 1.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Convertible Incm Gwth vs. Franklin Founding Funds
Performance |
| Timeline |
| Putnam Convertible Incm |
| Franklin Founding Funds |
Putnam Convertible and Franklin Founding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and Franklin Founding
The main advantage of trading using opposite Putnam Convertible and Franklin Founding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Franklin Founding 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 Franklin Founding will offset losses from the drop in Franklin Founding'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 |
| Franklin Founding vs. Fidelity Sai Convertible | Franklin Founding vs. Gabelli Convertible And | Franklin Founding vs. Putnam Convertible Incm Gwth | Franklin Founding vs. Absolute Convertible Arbitrage |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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