Correlation Between Putnam Convertible and Mfs Modity
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Mfs Modity 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 Mfs Modity 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 Mfs Modity Strategy, you can compare the effects of market volatilities on Putnam Convertible and Mfs Modity 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 Mfs Modity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Mfs Modity.
Diversification Opportunities for Putnam Convertible and Mfs Modity
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Putnam and Mfs is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Incm Gwth and Mfs Modity Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Modity Strategy 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 Mfs Modity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Modity Strategy has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Mfs Modity go up and down completely randomly.
Pair Corralation between Putnam Convertible and Mfs Modity
Assuming the 90 days horizon Putnam Convertible Incm Gwth is expected to generate 0.62 times more return on investment than Mfs Modity. However, Putnam Convertible Incm Gwth is 1.62 times less risky than Mfs Modity. It trades about 0.09 of its potential returns per unit of risk. Mfs Modity Strategy is currently generating about -0.01 per unit of risk. If you would invest 2,573 in Putnam Convertible Incm Gwth on September 13, 2024 and sell it today you would earn a total of 26.00 from holding Putnam Convertible Incm Gwth or generate 1.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Convertible Incm Gwth vs. Mfs Modity Strategy
Performance |
| Timeline |
| Putnam Convertible Incm |
| Mfs Modity Strategy |
Putnam Convertible and Mfs Modity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and Mfs Modity
The main advantage of trading using opposite Putnam Convertible and Mfs Modity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Mfs Modity 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 Mfs Modity will offset losses from the drop in Mfs Modity'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 |
| Mfs Modity vs. Multimedia Portfolio Multimedia | Mfs Modity vs. Small Cap Stock | Mfs Modity vs. Century Small Cap | Mfs Modity vs. Ab Value Fund |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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