Correlation Between Putnam Convertible and Great-west Lifetime
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Great-west Lifetime 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 Great-west Lifetime 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 Great West Lifetime 2020, you can compare the effects of market volatilities on Putnam Convertible and Great-west Lifetime 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 Great-west Lifetime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Great-west Lifetime.
Diversification Opportunities for Putnam Convertible and Great-west Lifetime
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Putnam and Great-west is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Incm Gwth and Great West Lifetime 2020 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Lifetime 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 Great-west Lifetime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Lifetime has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Great-west Lifetime go up and down completely randomly.
Pair Corralation between Putnam Convertible and Great-west Lifetime
Assuming the 90 days horizon Putnam Convertible Incm Gwth is expected to generate 1.21 times more return on investment than Great-west Lifetime. However, Putnam Convertible is 1.21 times more volatile than Great West Lifetime 2020. It trades about 0.08 of its potential returns per unit of risk. Great West Lifetime 2020 is currently generating about 0.06 per unit of risk. If you would invest 2,111 in Putnam Convertible Incm Gwth on September 4, 2024 and sell it today you would earn a total of 506.00 from holding Putnam Convertible Incm Gwth or generate 23.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Convertible Incm Gwth vs. Great West Lifetime 2020
Performance |
| Timeline |
| Putnam Convertible Incm |
| Great West Lifetime |
Putnam Convertible and Great-west Lifetime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and Great-west Lifetime
The main advantage of trading using opposite Putnam Convertible and Great-west Lifetime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Great-west Lifetime 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 Great-west Lifetime will offset losses from the drop in Great-west Lifetime's long position.| Putnam Convertible vs. Aig Government Money | Putnam Convertible vs. Fidelity Series Government | Putnam Convertible vs. Us Government Securities | Putnam Convertible vs. Lord Abbett Government |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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