Correlation Between Putnam Convertible and Income Fund
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Income Fund 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 Income Fund 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 Income Fund R 3, you can compare the effects of market volatilities on Putnam Convertible and Income Fund 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 Income Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Income Fund.
Diversification Opportunities for Putnam Convertible and Income Fund
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Putnam and Income is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Incm Gwth and Income Fund R 3 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Income Fund R 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 Income Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Income Fund R has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Income Fund go up and down completely randomly.
Pair Corralation between Putnam Convertible and Income Fund
Assuming the 90 days horizon Putnam Convertible Incm Gwth is expected to generate 1.59 times more return on investment than Income Fund. However, Putnam Convertible is 1.59 times more volatile than Income Fund R 3. It trades about 0.12 of its potential returns per unit of risk. Income Fund R 3 is currently generating about 0.04 per unit of risk. If you would invest 2,221 in Putnam Convertible Incm Gwth on September 12, 2024 and sell it today you would earn a total of 362.00 from holding Putnam Convertible Incm Gwth or generate 16.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Convertible Incm Gwth vs. Income Fund R 3
Performance |
| Timeline |
| Putnam Convertible Incm |
| Income Fund R |
Putnam Convertible and Income Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and Income Fund
The main advantage of trading using opposite Putnam Convertible and Income Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Income Fund 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 Income Fund will offset losses from the drop in Income Fund's long position.| Putnam Convertible vs. Sp Midcap Index | Putnam Convertible vs. Pnc Emerging Markets | Putnam Convertible vs. Ep Emerging Markets | Putnam Convertible vs. Ab All Market |
| Income Fund vs. Lord Abbett Convertible | Income Fund vs. Rationalpier 88 Convertible | Income Fund vs. Virtus Convertible | Income Fund vs. Putnam Convertible Incm Gwth |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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