Correlation Between Putnam Convertible and Jpmorgan Equity
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Jpmorgan Equity 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 Jpmorgan Equity 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 Jpmorgan Equity Index, you can compare the effects of market volatilities on Putnam Convertible and Jpmorgan Equity 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 Jpmorgan Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Jpmorgan Equity.
Diversification Opportunities for Putnam Convertible and Jpmorgan Equity
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Putnam and Jpmorgan is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Incm Gwth and Jpmorgan Equity Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Equity Index 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 Jpmorgan Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Equity Index has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Jpmorgan Equity go up and down completely randomly.
Pair Corralation between Putnam Convertible and Jpmorgan Equity
Assuming the 90 days horizon Putnam Convertible is expected to generate 1.03 times less return on investment than Jpmorgan Equity. But when comparing it to its historical volatility, Putnam Convertible Incm Gwth is 1.32 times less risky than Jpmorgan Equity. It trades about 0.17 of its potential returns per unit of risk. Jpmorgan Equity Index is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 8,684 in Jpmorgan Equity Index on September 13, 2024 and sell it today you would earn a total of 337.00 from holding Jpmorgan Equity Index or generate 3.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Convertible Incm Gwth vs. Jpmorgan Equity Index
Performance |
| Timeline |
| Putnam Convertible Incm |
| Jpmorgan Equity Index |
Putnam Convertible and Jpmorgan Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and Jpmorgan Equity
The main advantage of trading using opposite Putnam Convertible and Jpmorgan Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Jpmorgan Equity 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 Jpmorgan Equity will offset losses from the drop in Jpmorgan Equity'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 |
| Jpmorgan Equity vs. Rationalpier 88 Convertible | Jpmorgan Equity vs. Putnam Convertible Incm Gwth | Jpmorgan Equity vs. Allianzgi Convertible Income | Jpmorgan Equity vs. Virtus Convertible |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |