Correlation Between Performance Trust and Putnam Convertible
Can any of the company-specific risk be diversified away by investing in both Performance Trust and Putnam Convertible 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 Performance Trust and Putnam Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Performance Trust Municipal and Putnam Convertible Incm Gwth, you can compare the effects of market volatilities on Performance Trust and Putnam Convertible 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 Performance Trust with a short position of Putnam Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Trust and Putnam Convertible.
Diversification Opportunities for Performance Trust and Putnam Convertible
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Performance and Putnam is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Performance Trust Municipal and Putnam Convertible Incm Gwth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Convertible Incm and Performance Trust 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 Performance Trust Municipal are associated (or correlated) with Putnam Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Convertible Incm has no effect on the direction of Performance Trust i.e., Performance Trust and Putnam Convertible go up and down completely randomly.
Pair Corralation between Performance Trust and Putnam Convertible
Assuming the 90 days horizon Performance Trust is expected to generate 2.85 times less return on investment than Putnam Convertible. But when comparing it to its historical volatility, Performance Trust Municipal is 1.88 times less risky than Putnam Convertible. It trades about 0.04 of its potential returns per unit of risk. Putnam Convertible Incm Gwth is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,142 in Putnam Convertible Incm Gwth on October 13, 2024 and sell it today you would earn a total of 353.00 from holding Putnam Convertible Incm Gwth or generate 16.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Performance Trust Municipal vs. Putnam Convertible Incm Gwth
Performance |
| Timeline |
| Performance Trust |
| Putnam Convertible Incm |
Performance Trust and Putnam Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Performance Trust and Putnam Convertible
The main advantage of trading using opposite Performance Trust and Putnam Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Trust position performs unexpectedly, Putnam Convertible 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 Putnam Convertible will offset losses from the drop in Putnam Convertible's long position.| Performance Trust vs. Performance Trust Strategic | Performance Trust vs. Performance Trust Municipal | Performance Trust vs. Sierra Strategic Income | Performance Trust vs. Nuveen High Yield |
| Putnam Convertible vs. Putnam Multi Cap Growth | Putnam Convertible vs. Putnam Multi Cap Growth | Putnam Convertible vs. Putnam Sustainable Future | Putnam Convertible vs. Putnam Equity Income |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |