Correlation Between Putnam Convertible and Pace High
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Pace High 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 Pace High 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 Pace High Yield, you can compare the effects of market volatilities on Putnam Convertible and Pace High 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 Pace High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Pace High.
Diversification Opportunities for Putnam Convertible and Pace High
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Putnam and Pace is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Incm Gwth and Pace High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace High Yield 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 Pace High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace High Yield has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Pace High go up and down completely randomly.
Pair Corralation between Putnam Convertible and Pace High
Assuming the 90 days horizon Putnam Convertible Incm Gwth is expected to generate 3.1 times more return on investment than Pace High. However, Putnam Convertible is 3.1 times more volatile than Pace High Yield. It trades about 0.12 of its potential returns per unit of risk. Pace High Yield is currently generating about 0.25 per unit of risk. If you would invest 2,110 in Putnam Convertible Incm Gwth on September 21, 2024 and sell it today you would earn a total of 407.00 from holding Putnam Convertible Incm Gwth or generate 19.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Convertible Incm Gwth vs. Pace High Yield
Performance |
| Timeline |
| Putnam Convertible Incm |
| Pace High Yield |
Putnam Convertible and Pace High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and Pace High
The main advantage of trading using opposite Putnam Convertible and Pace High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Pace High 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 Pace High will offset losses from the drop in Pace High's long position.| Putnam Convertible vs. Putnam Equity Income | Putnam Convertible vs. Putnam Tax Exempt | Putnam Convertible vs. Putnam Floating Rate | Putnam Convertible vs. Putnam High Yield |
| Pace High vs. Gabelli Convertible And | Pace High vs. Putnam Convertible Incm Gwth | Pace High vs. Fidelity Sai Convertible | Pace High vs. Lord Abbett 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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