Correlation Between Putnam Convertible and Transamerica Asset
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Transamerica Asset 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 Transamerica Asset 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 Transamerica Asset Allocation, you can compare the effects of market volatilities on Putnam Convertible and Transamerica Asset 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 Transamerica Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Transamerica Asset.
Diversification Opportunities for Putnam Convertible and Transamerica Asset
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Putnam and Transamerica is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Incm Gwth and Transamerica Asset Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Asset 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 Transamerica Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Asset has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Transamerica Asset go up and down completely randomly.
Pair Corralation between Putnam Convertible and Transamerica Asset
Assuming the 90 days horizon Putnam Convertible Incm Gwth is expected to generate 1.21 times more return on investment than Transamerica Asset. However, Putnam Convertible is 1.21 times more volatile than Transamerica Asset Allocation. It trades about 0.18 of its potential returns per unit of risk. Transamerica Asset Allocation is currently generating about 0.12 per unit of risk. If you would invest 2,299 in Putnam Convertible Incm Gwth on September 13, 2024 and sell it today you would earn a total of 300.00 from holding Putnam Convertible Incm Gwth or generate 13.05% 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. Transamerica Asset Allocation
Performance |
| Timeline |
| Putnam Convertible Incm |
| Transamerica Asset |
Putnam Convertible and Transamerica Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and Transamerica Asset
The main advantage of trading using opposite Putnam Convertible and Transamerica Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Transamerica Asset 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 Transamerica Asset will offset losses from the drop in Transamerica Asset'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 |
| Transamerica Asset vs. Absolute Convertible Arbitrage | Transamerica Asset vs. Putnam Convertible Incm Gwth | Transamerica Asset vs. Allianzgi Convertible Income | Transamerica Asset vs. Virtus 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |