Correlation Between Putnam Convertible and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Fidelity Freedom 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 Fidelity Freedom 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 Fidelity Freedom Index, you can compare the effects of market volatilities on Putnam Convertible and Fidelity Freedom 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 Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Fidelity Freedom.
Diversification Opportunities for Putnam Convertible and Fidelity Freedom
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Putnam and Fidelity is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Incm Gwth and Fidelity Freedom Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Freedom Index 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 Fidelity Freedom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Freedom Index has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Putnam Convertible and Fidelity Freedom
Assuming the 90 days horizon Putnam Convertible is expected to generate 1.57 times less return on investment than Fidelity Freedom. But when comparing it to its historical volatility, Putnam Convertible Incm Gwth is 1.32 times less risky than Fidelity Freedom. It trades about 0.09 of its potential returns per unit of risk. Fidelity Freedom Index is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,587 in Fidelity Freedom Index on September 12, 2024 and sell it today you would earn a total of 673.00 from holding Fidelity Freedom Index or generate 42.41% 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. Fidelity Freedom Index
Performance |
| Timeline |
| Putnam Convertible Incm |
| Fidelity Freedom Index |
Putnam Convertible and Fidelity Freedom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and Fidelity Freedom
The main advantage of trading using opposite Putnam Convertible and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Fidelity Freedom 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 Fidelity Freedom will offset losses from the drop in Fidelity Freedom's long position.| Putnam Convertible vs. Sp Midcap Index | Putnam Convertible vs. Pnc Emerging Markets | Putnam Convertible vs. Ep Emerging Markets | Putnam Convertible vs. Ab All Market |
| Fidelity Freedom vs. Vanguard Target Retirement | Fidelity Freedom vs. Fidelity Freedom 2055 | Fidelity Freedom vs. Aquagold International | Fidelity Freedom vs. Morningstar Unconstrained Allocation |
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.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |