Correlation Between Putnam Convertible and Ab Small
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Ab Small 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 Ab Small 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 Ab Small Cap, you can compare the effects of market volatilities on Putnam Convertible and Ab Small 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 Ab Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Ab Small.
Diversification Opportunities for Putnam Convertible and Ab Small
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Putnam and SCAVX is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Incm Gwth and Ab Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Small Cap 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 Ab Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Small Cap has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Ab Small go up and down completely randomly.
Pair Corralation between Putnam Convertible and Ab Small
Assuming the 90 days horizon Putnam Convertible is expected to generate 1.35 times less return on investment than Ab Small. But when comparing it to its historical volatility, Putnam Convertible Incm Gwth is 2.37 times less risky than Ab Small. It trades about 0.15 of its potential returns per unit of risk. Ab Small Cap is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,269 in Ab Small Cap on September 3, 2024 and sell it today you would earn a total of 358.00 from holding Ab Small Cap or generate 28.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Convertible Incm Gwth vs. Ab Small Cap
Performance |
| Timeline |
| Putnam Convertible Incm |
| Ab Small Cap |
Putnam Convertible and Ab Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and Ab Small
The main advantage of trading using opposite Putnam Convertible and Ab Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Ab Small 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 Ab Small will offset losses from the drop in Ab Small's long position.| Putnam Convertible vs. Franklin Vertible Securities | Putnam Convertible vs. Franklin Vertible Securities | Putnam Convertible vs. Allianzgi Vertible Fund |
| Ab Small vs. Calamos Dynamic Convertible | Ab Small vs. Limited Term Tax | Ab Small vs. California Bond Fund | Ab Small vs. Ultra Short Fixed Income |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |