Correlation Between Baillie Gifford and Putnam Floating
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Putnam Floating 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 Baillie Gifford and Putnam Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baillie Gifford Health and Putnam Floating Rate, you can compare the effects of market volatilities on Baillie Gifford and Putnam Floating 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 Baillie Gifford with a short position of Putnam Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Putnam Floating.
Diversification Opportunities for Baillie Gifford and Putnam Floating
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Baillie and Putnam is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and Putnam Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Floating Rate and Baillie Gifford 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 Baillie Gifford Health are associated (or correlated) with Putnam Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Floating Rate has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Putnam Floating go up and down completely randomly.
Pair Corralation between Baillie Gifford and Putnam Floating
Assuming the 90 days horizon Baillie Gifford Health is expected to under-perform the Putnam Floating. In addition to that, Baillie Gifford is 6.99 times more volatile than Putnam Floating Rate. It trades about -0.03 of its total potential returns per unit of risk. Putnam Floating Rate is currently generating about 0.21 per unit of volatility. If you would invest 659.00 in Putnam Floating Rate on August 29, 2024 and sell it today you would earn a total of 142.00 from holding Putnam Floating Rate or generate 21.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford Health vs. Putnam Floating Rate
Performance |
| Timeline |
| Baillie Gifford Health |
| Putnam Floating Rate |
Baillie Gifford and Putnam Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Putnam Floating
The main advantage of trading using opposite Baillie Gifford and Putnam Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Putnam Floating 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 Floating will offset losses from the drop in Putnam Floating's long position.| Baillie Gifford vs. Fidelity Advisor Technology | Baillie Gifford vs. Fidelity Advisor Biotechnology | Baillie Gifford vs. Fidelity Advisor Financial | Baillie Gifford vs. Fidelity Advisor Utilities |
| Putnam Floating vs. Aqr Large Cap | Putnam Floating vs. Hartford Moderate Allocation | Putnam Floating vs. Washington Mutual Investors | Putnam Floating vs. Upright Assets Allocation |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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