Correlation Between Putnam Convertible and Wabmsx
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Wabmsx 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 Wabmsx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Convertible Securities and Wabmsx, you can compare the effects of market volatilities on Putnam Convertible and Wabmsx 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 Wabmsx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Wabmsx.
Diversification Opportunities for Putnam Convertible and Wabmsx
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Putnam and Wabmsx is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Securities and Wabmsx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wabmsx 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 Securities are associated (or correlated) with Wabmsx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wabmsx has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Wabmsx go up and down completely randomly.
Pair Corralation between Putnam Convertible and Wabmsx
Assuming the 90 days horizon Putnam Convertible is expected to generate 1.9 times less return on investment than Wabmsx. In addition to that, Putnam Convertible is 1.2 times more volatile than Wabmsx. It trades about 0.04 of its total potential returns per unit of risk. Wabmsx is currently generating about 0.1 per unit of volatility. If you would invest 1,783 in Wabmsx on September 8, 2025 and sell it today you would earn a total of 79.00 from holding Wabmsx or generate 4.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Convertible Securities vs. Wabmsx
Performance |
| Timeline |
| Putnam Convertible |
| Wabmsx |
Putnam Convertible and Wabmsx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Convertible and Wabmsx
The main advantage of trading using opposite Putnam Convertible and Wabmsx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Wabmsx 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 Wabmsx will offset losses from the drop in Wabmsx's long position.| Putnam Convertible vs. Putnam Tax Exempt | Putnam Convertible vs. Putnam High Yield | Putnam Convertible vs. Putnam Floating Rate | Putnam Convertible vs. Putnam Floating Rate |
| Wabmsx vs. Rmb Mendon Financial | Wabmsx vs. Vanguard Financials Index | Wabmsx vs. Putnam Global Financials | Wabmsx vs. Financial Industries 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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