Correlation Between Putnam Convertible and Fisher Investments

Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and Fisher Investments 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 Fisher Investments 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 Fisher All Foreign, you can compare the effects of market volatilities on Putnam Convertible and Fisher Investments 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 Fisher Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and Fisher Investments.

Diversification Opportunities for Putnam Convertible and Fisher Investments

-0.39

Correlation Coefficient

Putnam Convertible  Fisher Investments

Very good diversification

The 3 months correlation between Putnam and Fisher is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Incm Gwth and Fisher All Foreign in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fisher All Foreign 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 Fisher Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fisher All Foreign has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Fisher Investments go up and down completely randomly.

Pair Corralation between Putnam Convertible and Fisher Investments

Assuming the 90 days horizon Putnam Convertible Incm Gwth is expected to under-perform the Fisher Investments. But the mutual fund apears to be less risky and, when comparing its historical volatility, Putnam Convertible Incm Gwth is 1.25 times less risky than Fisher Investments. The mutual fund trades about -0.08 of its potential returns per unit of risk. The Fisher All Foreign is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,191  in Fisher All Foreign on December 29, 2024 and sell it today you would earn a total of  105.00  from holding Fisher All Foreign or generate 8.82% return on investment over 90 days.

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

Putnam Convertible Incm Gwth  vs.  Fisher All Foreign

Putnam Convertible Incm

Risk-Adjusted Performance

Very Weak

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

Fisher All Foreign

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fisher All Foreign are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Fisher Investments may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Putnam Convertible and Fisher Investments

The main advantage of trading using opposite Putnam Convertible and Fisher Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, Fisher Investments 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 Fisher Investments will offset losses from the drop in Fisher Investments' long position.

The idea behind Putnam Convertible Incm Gwth and Fisher All Foreign 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.

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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.