Correlation Between Muhlenkamp Fund and Putnam Small
Can any of the company-specific risk be diversified away by investing in both Muhlenkamp Fund and Putnam Small 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 Muhlenkamp Fund and Putnam Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Muhlenkamp Fund Institutional and Putnam Small Cap, you can compare the effects of market volatilities on Muhlenkamp Fund and Putnam Small 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 Muhlenkamp Fund with a short position of Putnam Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Muhlenkamp Fund and Putnam Small.
Diversification Opportunities for Muhlenkamp Fund and Putnam Small
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Muhlenkamp and Putnam is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Muhlenkamp Fund Institutional and Putnam Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Small Cap and Muhlenkamp Fund 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 Muhlenkamp Fund Institutional are associated (or correlated) with Putnam Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Small Cap has no effect on the direction of Muhlenkamp Fund i.e., Muhlenkamp Fund and Putnam Small go up and down completely randomly.
Pair Corralation between Muhlenkamp Fund and Putnam Small
Assuming the 90 days horizon Muhlenkamp Fund is expected to generate 2.21 times less return on investment than Putnam Small. But when comparing it to its historical volatility, Muhlenkamp Fund Institutional is 1.58 times less risky than Putnam Small. It trades about 0.21 of its potential returns per unit of risk. Putnam Small Cap is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 1,617 in Putnam Small Cap on August 26, 2024 and sell it today you would earn a total of 154.00 from holding Putnam Small Cap or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Muhlenkamp Fund Institutional vs. Putnam Small Cap
Performance |
| Timeline |
| Muhlenkamp Fund Inst |
| Putnam Small Cap |
Muhlenkamp Fund and Putnam Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Muhlenkamp Fund and Putnam Small
The main advantage of trading using opposite Muhlenkamp Fund and Putnam Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Muhlenkamp Fund position performs unexpectedly, Putnam Small 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 Small will offset losses from the drop in Putnam Small's long position.| Muhlenkamp Fund vs. Third Avenue Value | Muhlenkamp Fund vs. Meridian Growth Fund | Muhlenkamp Fund vs. Heartland Value Fund | Muhlenkamp Fund vs. Mairs Power Growth |
| Putnam Small vs. Putnam Multi Cap Growth | Putnam Small vs. Putnam Multi Cap Growth | Putnam Small vs. Putnam Sustainable Future | Putnam Small vs. Putnam Equity Income |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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