Correlation Between Putnam Convertible and Payden Limited
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Payden Limited 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 Payden Limited 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 Payden Limited Maturity, you can compare the effects of market volatilities on Putnam Convertible and Payden Limited 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 Payden Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Payden Limited.
Diversification Opportunities for Putnam Convertible and Payden Limited
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Putnam and Payden is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Incm Gwth and Payden Limited Maturity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Limited Maturity 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 Payden Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Limited Maturity has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Payden Limited go up and down completely randomly.
Pair Corralation between Putnam Convertible and Payden Limited
Assuming the 90 days horizon Putnam Convertible Incm Gwth is expected to generate 6.25 times more return on investment than Payden Limited. However, Putnam Convertible is 6.25 times more volatile than Payden Limited Maturity. It trades about 0.37 of its potential returns per unit of risk. Payden Limited Maturity is currently generating about 0.21 per unit of risk. If you would invest 2,494 in Putnam Convertible Incm Gwth on August 29, 2024 and sell it today you would earn a total of 121.00 from holding Putnam Convertible Incm Gwth or generate 4.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Putnam Convertible Incm Gwth vs. Payden Limited Maturity
Performance |
| Timeline |
| Putnam Convertible Incm |
| Payden Limited Maturity |
Putnam Convertible and Payden Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and Payden Limited
The main advantage of trading using opposite Putnam Convertible and Payden Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Payden Limited 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 Payden Limited will offset losses from the drop in Payden Limited's long position.| Putnam Convertible vs. T Rowe Price | Putnam Convertible vs. Ppm High Yield | Putnam Convertible vs. Metropolitan West High | Putnam Convertible vs. California High Yield Municipal |
| Payden Limited vs. Rationalpier 88 Convertible | Payden Limited vs. Lord Abbett Convertible | Payden Limited vs. Putnam Convertible Incm Gwth | Payden Limited vs. Calamos Dynamic 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 Stocks Directory module to find actively traded stocks across global markets.
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