Correlation Between Putnam Convertible and John Hancock
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and John Hancock 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 John Hancock 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 John Hancock Disciplined, you can compare the effects of market volatilities on Putnam Convertible and John Hancock 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 John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and John Hancock.
Diversification Opportunities for Putnam Convertible and John Hancock
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Putnam and John is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Incm Gwth and John Hancock Disciplined in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Disciplined 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 John Hancock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Hancock Disciplined has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and John Hancock go up and down completely randomly.
Pair Corralation between Putnam Convertible and John Hancock
Assuming the 90 days horizon Putnam Convertible is expected to generate 1.23 times less return on investment than John Hancock. But when comparing it to its historical volatility, Putnam Convertible Incm Gwth is 1.41 times less risky than John Hancock. It trades about 0.12 of its potential returns per unit of risk. John Hancock Disciplined is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,313 in John Hancock Disciplined on September 14, 2024 and sell it today you would earn a total of 457.00 from holding John Hancock Disciplined or generate 19.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Convertible Incm Gwth vs. John Hancock Disciplined
Performance |
| Timeline |
| Putnam Convertible Incm |
| John Hancock Disciplined |
Putnam Convertible and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and John Hancock
The main advantage of trading using opposite Putnam Convertible and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, John Hancock 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 John Hancock will offset losses from the drop in John Hancock's 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 |
| John Hancock vs. Regional Bank Fund | John Hancock vs. Regional Bank Fund | John Hancock vs. Multimanager Lifestyle Moderate | John Hancock vs. Multimanager Lifestyle Balanced |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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