Correlation Between Putnam Convertible and Thornburg Limited
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Thornburg 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 Thornburg 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 Thornburg Limited Term, you can compare the effects of market volatilities on Putnam Convertible and Thornburg 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 Thornburg Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Thornburg Limited.
Diversification Opportunities for Putnam Convertible and Thornburg Limited
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Putnam and Thornburg is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Incm Gwth and Thornburg Limited Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg Limited Term 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 Thornburg Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg Limited Term has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Thornburg Limited go up and down completely randomly.
Pair Corralation between Putnam Convertible and Thornburg Limited
Assuming the 90 days horizon Putnam Convertible Incm Gwth is expected to generate 2.35 times more return on investment than Thornburg Limited. However, Putnam Convertible is 2.35 times more volatile than Thornburg Limited Term. It trades about 0.08 of its potential returns per unit of risk. Thornburg Limited Term is currently generating about 0.08 per unit of risk. If you would invest 2,113 in Putnam Convertible Incm Gwth on August 26, 2024 and sell it today you would earn a total of 490.00 from holding Putnam Convertible Incm Gwth or generate 23.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Convertible Incm Gwth vs. Thornburg Limited Term
Performance |
| Timeline |
| Putnam Convertible Incm |
| Thornburg Limited Term |
Putnam Convertible and Thornburg Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and Thornburg Limited
The main advantage of trading using opposite Putnam Convertible and Thornburg Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Thornburg 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 Thornburg Limited will offset losses from the drop in Thornburg Limited's long position.| Putnam Convertible vs. Multisector Bond Sma | Putnam Convertible vs. Rationalpier 88 Convertible | Putnam Convertible vs. California Bond Fund | Putnam Convertible vs. Limited Term Tax |
| Thornburg Limited vs. Invesco Vertible Securities | Thornburg Limited vs. Putnam Convertible Incm Gwth | Thornburg Limited vs. Harbor Vertible Securities | Thornburg Limited vs. Miller Vertible Bond |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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