Correlation Between Floating Rate and Putnam Floating
Can any of the company-specific risk be diversified away by investing in both Floating Rate 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 Floating Rate and Putnam Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Floating Rate Fund and Putnam Floating Rate, you can compare the effects of market volatilities on Floating Rate 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 Floating Rate with a short position of Putnam Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Floating Rate and Putnam Floating.
Diversification Opportunities for Floating Rate and Putnam Floating
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Floating and Putnam is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Floating Rate Fund 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 Floating Rate 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 Floating Rate Fund 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 Floating Rate i.e., Floating Rate and Putnam Floating go up and down completely randomly.
Pair Corralation between Floating Rate and Putnam Floating
Assuming the 90 days horizon Floating Rate is expected to generate 3.09 times less return on investment than Putnam Floating. But when comparing it to its historical volatility, Floating Rate Fund is 1.35 times less risky than Putnam Floating. It trades about 0.1 of its potential returns per unit of risk. Putnam Floating Rate is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 797.00 in Putnam Floating Rate on September 1, 2024 and sell it today you would earn a total of 3.00 from holding Putnam Floating Rate or generate 0.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Floating Rate Fund vs. Putnam Floating Rate
Performance |
| Timeline |
| Floating Rate |
| Putnam Floating Rate |
Floating Rate and Putnam Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Floating Rate and Putnam Floating
The main advantage of trading using opposite Floating Rate and Putnam Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Floating Rate 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.| Floating Rate vs. Mirova Global Green | Floating Rate vs. Rbc Global Opportunities | Floating Rate vs. Barings Global Floating | Floating Rate vs. Wisdomtree Siegel Global |
| Putnam Floating vs. Putnam Equity Income | Putnam Floating vs. Putnam Tax Exempt | Putnam Floating vs. Putnam High Yield | Putnam Floating vs. Putnam Floating Rate |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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