Correlation Between Putnam Convertible and Mainstay Candriam

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Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Mainstay Candriam 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 Mainstay Candriam 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 Mainstay Candriam Emerging, you can compare the effects of market volatilities on Putnam Convertible and Mainstay Candriam 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 Mainstay Candriam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Mainstay Candriam.

Diversification Opportunities for Putnam Convertible and Mainstay Candriam

0.13
  Correlation Coefficient

Average diversification

The 3 months correlation between Putnam and Mainstay is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Incm Gwth and Mainstay Candriam Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Candriam 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 Mainstay Candriam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Candriam has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Mainstay Candriam go up and down completely randomly.

Pair Corralation between Putnam Convertible and Mainstay Candriam

Assuming the 90 days horizon Putnam Convertible Incm Gwth is expected to generate 0.61 times more return on investment than Mainstay Candriam. However, Putnam Convertible Incm Gwth is 1.65 times less risky than Mainstay Candriam. It trades about 0.09 of its potential returns per unit of risk. Mainstay Candriam Emerging is currently generating about 0.05 per unit of risk. If you would invest  2,060  in Putnam Convertible Incm Gwth on September 12, 2024 and sell it today you would earn a total of  523.00  from holding Putnam Convertible Incm Gwth or generate 25.39% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Putnam Convertible Incm Gwth  vs.  Mainstay Candriam Emerging

 Performance 
       Timeline  
Putnam Convertible Incm 

Risk-Adjusted Performance

20 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Putnam Convertible Incm Gwth are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Putnam Convertible may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Mainstay Candriam 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Candriam Emerging are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Mainstay Candriam is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Putnam Convertible and Mainstay Candriam Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Putnam Convertible and Mainstay Candriam

The main advantage of trading using opposite Putnam Convertible and Mainstay Candriam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Mainstay Candriam 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 Mainstay Candriam will offset losses from the drop in Mainstay Candriam's long position.
The idea behind Putnam Convertible Incm Gwth and Mainstay Candriam Emerging pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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