Correlation Between Putnam Floating and Putnam Dynamic
Can any of the company-specific risk be diversified away by investing in both Putnam Floating and Putnam Dynamic 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 Floating and Putnam Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Floating Rate and Putnam Dynamic Asset, you can compare the effects of market volatilities on Putnam Floating and Putnam Dynamic 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 Floating with a short position of Putnam Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Floating and Putnam Dynamic.
Diversification Opportunities for Putnam Floating and Putnam Dynamic
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Putnam and Putnam is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Floating Rate and Putnam Dynamic Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Dynamic Asset and Putnam Floating 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 Floating Rate are associated (or correlated) with Putnam Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Dynamic Asset has no effect on the direction of Putnam Floating i.e., Putnam Floating and Putnam Dynamic go up and down completely randomly.
Pair Corralation between Putnam Floating and Putnam Dynamic
Assuming the 90 days horizon Putnam Floating is expected to generate 11.01 times less return on investment than Putnam Dynamic. But when comparing it to its historical volatility, Putnam Floating Rate is 6.78 times less risky than Putnam Dynamic. It trades about 0.21 of its potential returns per unit of risk. Putnam Dynamic Asset is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 2,122 in Putnam Dynamic Asset on September 1, 2024 and sell it today you would earn a total of 89.00 from holding Putnam Dynamic Asset or generate 4.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Floating Rate vs. Putnam Dynamic Asset
Performance |
| Timeline |
| Putnam Floating Rate |
| Putnam Dynamic Asset |
Putnam Floating and Putnam Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Floating and Putnam Dynamic
The main advantage of trading using opposite Putnam Floating and Putnam Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Floating position performs unexpectedly, Putnam Dynamic 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 Dynamic will offset losses from the drop in Putnam Dynamic's long position.| Putnam Floating vs. Putnam Equity Income | Putnam Floating vs. Putnam Tax Exempt | Putnam Floating vs. Putnam High Yield | Putnam Floating vs. Putnam Floating Rate |
| Putnam Dynamic vs. Putnam Equity Income | Putnam Dynamic vs. Putnam Tax Exempt | Putnam Dynamic vs. Putnam Floating Rate | Putnam Dynamic vs. Putnam High Yield |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |