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
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Putnam and Transamerica is 0.88. 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 is expected to generate 1.31 times less return on investment than Transamerica Asset. But when comparing it to its historical volatility, Putnam Convertible Incm Gwth is 1.1 times less risky than Transamerica Asset. It trades about 0.09 of its potential returns per unit of risk. Transamerica Asset Allocation is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,038 in Transamerica Asset Allocation on September 12, 2024 and sell it today you would earn a total of 359.00 from holding Transamerica Asset Allocation or generate 34.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| 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. Sp Midcap Index | Putnam Convertible vs. Pnc Emerging Markets | Putnam Convertible vs. Ep Emerging Markets | Putnam Convertible vs. Ab All Market |
| Transamerica Asset vs. Putnam Convertible Incm Gwth | Transamerica Asset vs. Allianzgi Convertible Income | Transamerica Asset vs. Calamos Dynamic Convertible | Transamerica Asset vs. Lord Abbett 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |