Correlation Between Putnam Convertible and Franklin Utilities
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Franklin Utilities 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 Utilities 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 Utilities Fund, you can compare the effects of market volatilities on Putnam Convertible and Franklin Utilities 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 Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Franklin Utilities.
Diversification Opportunities for Putnam Convertible and Franklin Utilities
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Putnam and Franklin is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Incm Gwth and Franklin Utilities Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Utilities 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 Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Utilities has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Franklin Utilities go up and down completely randomly.
Pair Corralation between Putnam Convertible and Franklin Utilities
Assuming the 90 days horizon Putnam Convertible is expected to generate 1.51 times less return on investment than Franklin Utilities. But when comparing it to its historical volatility, Putnam Convertible Incm Gwth is 1.82 times less risky than Franklin Utilities. It trades about 0.12 of its potential returns per unit of risk. Franklin Utilities Fund is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,988 in Franklin Utilities Fund on September 14, 2024 and sell it today you would earn a total of 485.00 from holding Franklin Utilities Fund or generate 24.4% 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 Utilities Fund
Performance |
| Timeline |
| Putnam Convertible Incm |
| Franklin Utilities |
Putnam Convertible and Franklin Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and Franklin Utilities
The main advantage of trading using opposite Putnam Convertible and Franklin Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Franklin Utilities 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 Utilities will offset losses from the drop in Franklin Utilities' 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 |
| Franklin Utilities vs. Siit Small Mid | Franklin Utilities vs. Cardinal Small Cap | Franklin Utilities vs. Small Pany Growth | Franklin Utilities vs. Vy Columbia Small |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |