Correlation Between Putnam Convertible and Putnam U
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Putnam U 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 Putnam U 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 Putnam U S, you can compare the effects of market volatilities on Putnam Convertible and Putnam U 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 Putnam U. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Putnam U.
Diversification Opportunities for Putnam Convertible and Putnam U
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Putnam and Putnam is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Incm Gwth and Putnam U S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam U S 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 Putnam U. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam U S has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Putnam U go up and down completely randomly.
Pair Corralation between Putnam Convertible and Putnam U
Assuming the 90 days horizon Putnam Convertible Incm Gwth is expected to generate 1.38 times more return on investment than Putnam U. However, Putnam Convertible is 1.38 times more volatile than Putnam U S. It trades about 0.15 of its potential returns per unit of risk. Putnam U S is currently generating about 0.1 per unit of risk. If you would invest 2,161 in Putnam Convertible Incm Gwth on September 4, 2024 and sell it today you would earn a total of 456.00 from holding Putnam Convertible Incm Gwth or generate 21.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Putnam Convertible Incm Gwth vs. Putnam U S
Performance |
| Timeline |
| Putnam Convertible Incm |
| Putnam U S |
Putnam Convertible and Putnam U Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and Putnam U
The main advantage of trading using opposite Putnam Convertible and Putnam U positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Putnam U 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 Putnam U will offset losses from the drop in Putnam U'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 |
| Putnam U vs. George Putnam Fund | Putnam U vs. Putnam Equity Income | Putnam U vs. Putnam International Equity | Putnam U vs. Aquagold International |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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