Correlation Between Putnam Convertible and Strategic Asset
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Strategic Asset 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 Strategic Asset 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 Strategic Asset Management, you can compare the effects of market volatilities on Putnam Convertible and Strategic Asset 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 Strategic Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Strategic Asset.
Diversification Opportunities for Putnam Convertible and Strategic Asset
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Putnam and Strategic is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Incm Gwth and Strategic Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Asset Mana 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 Strategic Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Asset Mana has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Strategic Asset go up and down completely randomly.
Pair Corralation between Putnam Convertible and Strategic Asset
Assuming the 90 days horizon Putnam Convertible Incm Gwth is expected to generate 1.23 times more return on investment than Strategic Asset. However, Putnam Convertible is 1.23 times more volatile than Strategic Asset Management. It trades about 0.53 of its potential returns per unit of risk. Strategic Asset Management is currently generating about 0.39 per unit of risk. If you would invest 2,474 in Putnam Convertible Incm Gwth on September 1, 2024 and sell it today you would earn a total of 151.00 from holding Putnam Convertible Incm Gwth or generate 6.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Putnam Convertible Incm Gwth vs. Strategic Asset Management
Performance |
| Timeline |
| Putnam Convertible Incm |
| Strategic Asset Mana |
Putnam Convertible and Strategic Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and Strategic Asset
The main advantage of trading using opposite Putnam Convertible and Strategic Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Strategic Asset 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 Strategic Asset will offset losses from the drop in Strategic Asset'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 Floating Rate |
| Strategic Asset vs. Putnam Convertible Incm Gwth | Strategic Asset vs. Calamos Dynamic Convertible | Strategic Asset vs. The Gamco Global |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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