Correlation Between Falcon Focus and Putnam Convertible

Can any of the company-specific risk be diversified away by investing in both Falcon Focus 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 Falcon Focus and Putnam Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Falcon Focus Scv and Putnam Vertible Securities, you can compare the effects of market volatilities on Falcon Focus 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 Falcon Focus with a short position of Putnam Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Focus and Putnam Convertible.

Diversification Opportunities for Falcon Focus and Putnam Convertible

0.0

Correlation Coefficient

Falcon Focus  Putnam Convertible

Pay attention - limited upside

The 3 months correlation between Falcon and Putnam is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Focus Scv and Putnam Vertible Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Vertible Secu and Falcon Focus 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 Falcon Focus Scv 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 Vertible Secu has no effect on the direction of Falcon Focus i.e., Falcon Focus and Putnam Convertible go up and down completely randomly.

Pair Corralation between Falcon Focus and Putnam Convertible

If you would invest  2,539  in Putnam Vertible Securities on September 1, 2024 and sell it today you would earn a total of  148.00  from holding Putnam Vertible Securities or generate 5.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Falcon Focus Scv  vs.  Putnam Vertible Securities

Falcon Focus Scv

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Falcon Focus Scv has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Falcon Focus is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Putnam Vertible Secu

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Putnam Vertible Securities are ranked lower than 26 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Putnam Convertible may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Falcon Focus and Putnam Convertible

The main advantage of trading using opposite Falcon Focus and Putnam Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falcon Focus 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.

The idea behind Falcon Focus Scv and Putnam Vertible Securities pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.