Correlation Between Putnam Convertible and Thrivent Government
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Thrivent Government 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 Thrivent Government 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 Thrivent Government Bond, you can compare the effects of market volatilities on Putnam Convertible and Thrivent Government 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 Thrivent Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Thrivent Government.
Diversification Opportunities for Putnam Convertible and Thrivent Government
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Putnam and Thrivent is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Incm Gwth and Thrivent Government Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Government Bond 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 Thrivent Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Government Bond has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Thrivent Government go up and down completely randomly.
Pair Corralation between Putnam Convertible and Thrivent Government
Assuming the 90 days horizon Putnam Convertible Incm Gwth is expected to generate 1.48 times more return on investment than Thrivent Government. However, Putnam Convertible is 1.48 times more volatile than Thrivent Government Bond. It trades about 0.15 of its potential returns per unit of risk. Thrivent Government Bond is currently generating about 0.06 per unit of risk. If you would invest 2,161 in Putnam Convertible Incm Gwth on September 4, 2024 and sell it today you would earn a total of 456.00 from holding Putnam Convertible Incm Gwth or generate 21.1% 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. Thrivent Government Bond
Performance |
| Timeline |
| Putnam Convertible Incm |
| Thrivent Government Bond |
Putnam Convertible and Thrivent Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and Thrivent Government
The main advantage of trading using opposite Putnam Convertible and Thrivent Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Thrivent Government 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 Thrivent Government will offset losses from the drop in Thrivent Government's long position.| Putnam Convertible vs. Aig Government Money | Putnam Convertible vs. Fidelity Series Government | Putnam Convertible vs. Us Government Securities | Putnam Convertible vs. Lord Abbett Government |
| Thrivent Government vs. Franklin Natural Resources | Thrivent Government vs. Energy Basic Materials | Thrivent Government vs. Invesco Energy Fund | Thrivent Government vs. World Energy Fund |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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