Correlation Between Putnam Convertible and Rmb Fund
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Rmb 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 Rmb 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 Rmb Fund I, you can compare the effects of market volatilities on Putnam Convertible and Rmb 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 Rmb Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Rmb Fund.
Diversification Opportunities for Putnam Convertible and Rmb Fund
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Putnam and Rmb is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Incm Gwth and Rmb Fund I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rmb Fund I 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 Rmb Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rmb Fund I has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Rmb Fund go up and down completely randomly.
Pair Corralation between Putnam Convertible and Rmb Fund
Assuming the 90 days horizon Putnam Convertible Incm Gwth is expected to generate 0.95 times more return on investment than Rmb Fund. However, Putnam Convertible Incm Gwth is 1.06 times less risky than Rmb Fund. It trades about 0.09 of its potential returns per unit of risk. Rmb Fund I is currently generating about 0.08 per unit of risk. If you would invest 2,573 in Putnam Convertible Incm Gwth on September 13, 2024 and sell it today you would earn a total of 26.00 from holding Putnam Convertible Incm Gwth or generate 1.01% 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. Rmb Fund I
Performance |
| Timeline |
| Putnam Convertible Incm |
| Rmb Fund I |
Putnam Convertible and Rmb Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and Rmb Fund
The main advantage of trading using opposite Putnam Convertible and Rmb Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Rmb 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 Rmb Fund will offset losses from the drop in Rmb Fund'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 |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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