Correlation Between Putnam Convertible and Columbia Treasury
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Columbia Treasury 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 Columbia Treasury 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 Columbia Treasury Index, you can compare the effects of market volatilities on Putnam Convertible and Columbia Treasury 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 Columbia Treasury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Columbia Treasury.
Diversification Opportunities for Putnam Convertible and Columbia Treasury
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Putnam and Columbia is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Incm Gwth and Columbia Treasury Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Treasury Index 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 Columbia Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Treasury Index has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Columbia Treasury go up and down completely randomly.
Pair Corralation between Putnam Convertible and Columbia Treasury
Assuming the 90 days horizon Putnam Convertible Incm Gwth is expected to under-perform the Columbia Treasury. In addition to that, Putnam Convertible is 2.67 times more volatile than Columbia Treasury Index. It trades about -0.08 of its total potential returns per unit of risk. Columbia Treasury Index is currently generating about 0.14 per unit of volatility. If you would invest 974.00 in Columbia Treasury Index on December 29, 2024 and sell it today you would earn a total of 25.00 from holding Columbia Treasury Index or generate 2.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.39% |
Values | Daily Returns |
Putnam Convertible Incm Gwth vs. Columbia Treasury Index
Performance |
Timeline |
Putnam Convertible Incm |
Columbia Treasury Index |
Putnam Convertible and Columbia Treasury Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Putnam Convertible and Columbia Treasury
The main advantage of trading using opposite Putnam Convertible and Columbia Treasury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Columbia Treasury 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 Columbia Treasury will offset losses from the drop in Columbia Treasury's long position.Putnam Convertible vs. Federated Clover Small | Putnam Convertible vs. Allianzgi International Small Cap | Putnam Convertible vs. Ultrashort Small Cap Profund | Putnam Convertible vs. Tiaa Cref Mid Cap Value |
Columbia Treasury vs. Morningstar Defensive Bond | Columbia Treasury vs. Transamerica Bond Class | Columbia Treasury vs. Artisan High Income | Columbia Treasury vs. Rbc Ultra Short Fixed |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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