Correlation Between Putnam Convertible and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Morgan Stanley 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 Morgan Stanley 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 Morgan Stanley Government, you can compare the effects of market volatilities on Putnam Convertible and Morgan Stanley 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 Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Morgan Stanley.
Diversification Opportunities for Putnam Convertible and Morgan Stanley
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Putnam and Morgan is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Incm Gwth and Morgan Stanley Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley Government 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 Morgan Stanley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morgan Stanley Government has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Morgan Stanley go up and down completely randomly.
Pair Corralation between Putnam Convertible and Morgan Stanley
Assuming the 90 days horizon Putnam Convertible Incm Gwth is expected to generate 0.52 times more return on investment than Morgan Stanley. However, Putnam Convertible Incm Gwth is 1.91 times less risky than Morgan Stanley. It trades about 0.09 of its potential returns per unit of risk. Morgan Stanley Government is currently generating about 0.02 per unit of risk. If you would invest 2,060 in Putnam Convertible Incm Gwth on September 12, 2024 and sell it today you would earn a total of 523.00 from holding Putnam Convertible Incm Gwth or generate 25.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Putnam Convertible Incm Gwth vs. Morgan Stanley Government
Performance |
| Timeline |
| Putnam Convertible Incm |
| Morgan Stanley Government |
Putnam Convertible and Morgan Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and Morgan Stanley
The main advantage of trading using opposite Putnam Convertible and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Morgan Stanley 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 Morgan Stanley will offset losses from the drop in Morgan Stanley's long position.| Putnam Convertible vs. Sp Midcap Index | Putnam Convertible vs. Pnc Emerging Markets | Putnam Convertible vs. Ep Emerging Markets | Putnam Convertible vs. Ab All Market |
| Morgan Stanley vs. Vanguard Long Term Treasury | Morgan Stanley vs. SCOR PK | Morgan Stanley vs. Morningstar Unconstrained Allocation | Morgan Stanley vs. Thrivent High Yield |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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