Correlation Between Putnam Convertible and Lazard Strategic

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

Diversification Opportunities for Putnam Convertible and Lazard Strategic

0.95

Correlation Coefficient

Putnam Convertible  Lazard Strategic

Almost no diversification

The 3 months correlation between Putnam and Lazard is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Incm Gwth and Lazard Strategic Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Strategic Equity 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 Lazard Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Strategic Equity has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and Lazard Strategic go up and down completely randomly.

Pair Corralation between Putnam Convertible and Lazard Strategic

Assuming the 90 days horizon Putnam Convertible Incm Gwth is expected to under-perform the Lazard Strategic. But the mutual fund apears to be less risky and, when comparing its historical volatility, Putnam Convertible Incm Gwth is 1.13 times less risky than Lazard Strategic. The mutual fund trades about -0.08 of its potential returns per unit of risk. The Lazard Strategic Equity is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  1,662  in Lazard Strategic Equity on December 28, 2024 and sell it today you would lose (40.00) from holding Lazard Strategic Equity or give up 2.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Putnam Convertible Incm Gwth  vs.  Lazard Strategic Equity

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.

Lazard Strategic Equity

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Putnam Convertible and Lazard Strategic

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

The idea behind Putnam Convertible Incm Gwth and Lazard Strategic Equity 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 CEOs Directory module to screen CEOs from public companies around the world.