Correlation Between Putnam Convertible and Tiaa-cref Large-cap
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Tiaa-cref Large-cap 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 Tiaa-cref Large-cap 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 Tiaa Cref Large Cap Growth, you can compare the effects of market volatilities on Putnam Convertible and Tiaa-cref Large-cap 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 Tiaa-cref Large-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Tiaa-cref Large-cap.
Diversification Opportunities for Putnam Convertible and Tiaa-cref Large-cap
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Putnam and Tiaa-cref is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Incm Gwth and Tiaa Cref Large Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa-cref Large-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 Tiaa-cref Large-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tiaa-cref Large-cap has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Tiaa-cref Large-cap go up and down completely randomly.
Pair Corralation between Putnam Convertible and Tiaa-cref Large-cap
Assuming the 90 days horizon Putnam Convertible is expected to generate 1.26 times less return on investment than Tiaa-cref Large-cap. But when comparing it to its historical volatility, Putnam Convertible Incm Gwth is 1.74 times less risky than Tiaa-cref Large-cap. It trades about 0.48 of its potential returns per unit of risk. Tiaa Cref Large Cap Growth is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 6,455 in Tiaa Cref Large Cap Growth on September 4, 2024 and sell it today you would earn a total of 455.00 from holding Tiaa Cref Large Cap Growth or generate 7.05% 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. Tiaa Cref Large Cap Growth
Performance |
| Timeline |
| Putnam Convertible Incm |
| Tiaa-cref Large-cap |
Putnam Convertible and Tiaa-cref Large-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and Tiaa-cref Large-cap
The main advantage of trading using opposite Putnam Convertible and Tiaa-cref Large-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Tiaa-cref Large-cap 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 Tiaa-cref Large-cap will offset losses from the drop in Tiaa-cref Large-cap'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 |
| Tiaa-cref Large-cap vs. Tiaa Cref Large Cap Growth | Tiaa-cref Large-cap vs. Tiaa Cref Large Cap Growth | Tiaa-cref Large-cap vs. Nasdaq 100 Fund Class | Tiaa-cref Large-cap vs. Fidelity Growth Discovery |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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