Correlation Between Putnam Convertible and FEDERATED MDT

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Putnam Convertible and FEDERATED MDT 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 FEDERATED MDT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Convertible Sec and FEDERATED MDT BALANCED, you can compare the effects of market volatilities on Putnam Convertible and FEDERATED MDT 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 FEDERATED MDT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Convertible and FEDERATED MDT.

Diversification Opportunities for Putnam Convertible and FEDERATED MDT

0.75
  Correlation Coefficient

Poor diversification

The 3 months correlation between Putnam and FEDERATED is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Convertible Sec and FEDERATED MDT BALANCED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEDERATED MDT BALANCED 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 Sec are associated (or correlated) with FEDERATED MDT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEDERATED MDT BALANCED has no effect on the direction of Putnam Convertible i.e., Putnam Convertible and FEDERATED MDT go up and down completely randomly.

Pair Corralation between Putnam Convertible and FEDERATED MDT

Assuming the 90 days horizon Putnam Convertible Sec is expected to generate 0.57 times more return on investment than FEDERATED MDT. However, Putnam Convertible Sec is 1.74 times less risky than FEDERATED MDT. It trades about 0.15 of its potential returns per unit of risk. FEDERATED MDT BALANCED is currently generating about -0.02 per unit of risk. If you would invest  2,134  in Putnam Convertible Sec on September 8, 2022 and sell it today you would earn a total of  64.00  from holding Putnam Convertible Sec or generate 3.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.45%
ValuesDaily Returns

Putnam Convertible Sec  vs.  FEDERATED MDT BALANCED

 Performance (%) 
       Timeline  
Putnam Convertible Sec 
Putnam Performance
0 of 100
Over the last 90 days Putnam Convertible Sec has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Putnam Convertible is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Putnam Price Channel

FEDERATED MDT BALANCED 
FEDERATED Performance
0 of 100
Over the last 90 days FEDERATED MDT BALANCED has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, FEDERATED MDT is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

FEDERATED Price Channel

Putnam Convertible and FEDERATED MDT Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Putnam Convertible and FEDERATED MDT

The main advantage of trading using opposite Putnam Convertible and FEDERATED MDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Convertible position performs unexpectedly, FEDERATED MDT 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 FEDERATED MDT will offset losses from the drop in FEDERATED MDT's long position.
Putnam Convertible vs. American Century One
Putnam Convertible vs. FIDELITY FLEX FREEDOM
Putnam Convertible vs. Putnam Retirement Advantage
Putnam Convertible vs. FIDELITY FLEX FREEDOM
The idea behind Putnam Convertible Sec and FEDERATED MDT BALANCED 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.
FEDERATED MDT vs. IVY EMERGING MARKETS
FEDERATED MDT vs. IVY EMERGING MARKETS
FEDERATED MDT vs. IVY EMERGING MARKETS
FEDERATED MDT vs. THE HARTFORD EMERGING
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

Other Complementary Tools

Piotroski F Score
Get Piotroski F Score based on binary analysis strategy of nine different fundamentals
Go
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Go
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Go
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Go
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Go
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Go