Correlation Between Putnam Convertible and Highland Longshort
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Highland Longshort 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 Highland Longshort 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 Highland Longshort Healthcare, you can compare the effects of market volatilities on Putnam Convertible and Highland Longshort 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 Highland Longshort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Highland Longshort.
Diversification Opportunities for Putnam Convertible and Highland Longshort
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Putnam and Highland is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Incm Gwth and Highland Longshort Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Longshort 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 Highland Longshort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Longshort has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Highland Longshort go up and down completely randomly.
Pair Corralation between Putnam Convertible and Highland Longshort
Assuming the 90 days horizon Putnam Convertible Incm Gwth is expected to generate 2.67 times more return on investment than Highland Longshort. However, Putnam Convertible is 2.67 times more volatile than Highland Longshort Healthcare. It trades about 0.08 of its potential returns per unit of risk. Highland Longshort Healthcare is currently generating about 0.12 per unit of risk. If you would invest 2,058 in Putnam Convertible Incm Gwth on September 19, 2024 and sell it today you would earn a total of 464.00 from holding Putnam Convertible Incm Gwth or generate 22.55% 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. Highland Longshort Healthcare
Performance |
| Timeline |
| Putnam Convertible Incm |
| Highland Longshort |
Putnam Convertible and Highland Longshort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and Highland Longshort
The main advantage of trading using opposite Putnam Convertible and Highland Longshort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Highland Longshort 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 Highland Longshort will offset losses from the drop in Highland Longshort'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 High Yield |
| Highland Longshort vs. Virtus Convertible | Highland Longshort vs. Rationalpier 88 Convertible | Highland Longshort vs. Putnam Convertible Incm Gwth | Highland Longshort vs. Advent Claymore Convertible |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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