Correlation Between Putnam Floating and Putnam Multi-cap
Can any of the company-specific risk be diversified away by investing in both Putnam Floating and Putnam Multi-cap 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 Multi-cap 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 Multi Cap Growth, you can compare the effects of market volatilities on Putnam Floating and Putnam Multi-cap 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 Multi-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Floating and Putnam Multi-cap.
Diversification Opportunities for Putnam Floating and Putnam Multi-cap
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 Multi Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Multi Cap 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 Multi-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Multi Cap has no effect on the direction of Putnam Floating i.e., Putnam Floating and Putnam Multi-cap go up and down completely randomly.
Pair Corralation between Putnam Floating and Putnam Multi-cap
Assuming the 90 days horizon Putnam Floating is expected to generate 3.87 times less return on investment than Putnam Multi-cap. But when comparing it to its historical volatility, Putnam Floating Rate is 5.38 times less risky than Putnam Multi-cap. It trades about 0.2 of its potential returns per unit of risk. Putnam Multi Cap Growth is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 10,471 in Putnam Multi Cap Growth on September 3, 2024 and sell it today you would earn a total of 3,436 from holding Putnam Multi Cap Growth or generate 32.81% 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 Multi Cap Growth
Performance |
| Timeline |
| Putnam Floating Rate |
| Putnam Multi Cap |
Putnam Floating and Putnam Multi-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Floating and Putnam Multi-cap
The main advantage of trading using opposite Putnam Floating and Putnam Multi-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Floating position performs unexpectedly, Putnam Multi-cap 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 Multi-cap will offset losses from the drop in Putnam Multi-cap's long position.| Putnam Floating vs. Rbb Fund | Putnam Floating vs. Rbc Small Cap | Putnam Floating vs. Kinetics Small Cap | Putnam Floating vs. Ancorathelen Small Mid Cap |
| Putnam Multi-cap vs. Semiconductor Ultrasector Profund | Putnam Multi-cap vs. Volumetric Fund Volumetric | Putnam Multi-cap vs. Omni Small Cap Value | Putnam Multi-cap vs. Nasdaq 100 Fund Class |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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