Correlation Between Putnam Convertible and Nuveen Intermediate
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Nuveen Intermediate 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 Nuveen Intermediate 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 Nuveen Intermediate Duration, you can compare the effects of market volatilities on Putnam Convertible and Nuveen Intermediate 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 Nuveen Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Nuveen Intermediate.
Diversification Opportunities for Putnam Convertible and Nuveen Intermediate
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Putnam and Nuveen is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Incm Gwth and Nuveen Intermediate Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Intermediate 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 Nuveen Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Intermediate has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Nuveen Intermediate go up and down completely randomly.
Pair Corralation between Putnam Convertible and Nuveen Intermediate
Assuming the 90 days horizon Putnam Convertible Incm Gwth is expected to generate 2.6 times more return on investment than Nuveen Intermediate. However, Putnam Convertible is 2.6 times more volatile than Nuveen Intermediate Duration. It trades about 0.1 of its potential returns per unit of risk. Nuveen Intermediate Duration is currently generating about 0.09 per unit of risk. If you would invest 2,165 in Putnam Convertible Incm Gwth on September 4, 2024 and sell it today you would earn a total of 452.00 from holding Putnam Convertible Incm Gwth or generate 20.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Putnam Convertible Incm Gwth vs. Nuveen Intermediate Duration
Performance |
| Timeline |
| Putnam Convertible Incm |
| Nuveen Intermediate |
Putnam Convertible and Nuveen Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and Nuveen Intermediate
The main advantage of trading using opposite Putnam Convertible and Nuveen Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Nuveen Intermediate 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 Nuveen Intermediate will offset losses from the drop in Nuveen Intermediate'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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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