Correlation Between Putnam Convertible and Mfs International
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Mfs International 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 International 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 International Growth, you can compare the effects of market volatilities on Putnam Convertible and Mfs International 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 International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Mfs International.
Diversification Opportunities for Putnam Convertible and Mfs International
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Putnam and Mfs is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Incm Gwth and Mfs International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs International Growth 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 International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs International Growth has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Mfs International go up and down completely randomly.
Pair Corralation between Putnam Convertible and Mfs International
Assuming the 90 days horizon Putnam Convertible is expected to generate 1.72 times less return on investment than Mfs International. But when comparing it to its historical volatility, Putnam Convertible Incm Gwth is 1.04 times less risky than Mfs International. It trades about 0.09 of its potential returns per unit of risk. Mfs International Growth is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 4,483 in Mfs International Growth on September 13, 2024 and sell it today you would earn a total of 83.00 from holding Mfs International Growth or generate 1.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Putnam Convertible Incm Gwth vs. Mfs International Growth
Performance |
| Timeline |
| Putnam Convertible Incm |
| Mfs International Growth |
Putnam Convertible and Mfs International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and Mfs International
The main advantage of trading using opposite Putnam Convertible and Mfs International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Mfs International 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 International will offset losses from the drop in Mfs International'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 |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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