Correlation Between Putnam Multi-cap and Baird Strategic
Can any of the company-specific risk be diversified away by investing in both Putnam Multi-cap and Baird Strategic 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 Multi-cap and Baird Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Multi Cap Growth and Baird Strategic Municipal, you can compare the effects of market volatilities on Putnam Multi-cap and Baird Strategic 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 Multi-cap with a short position of Baird Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Multi-cap and Baird Strategic.
Diversification Opportunities for Putnam Multi-cap and Baird Strategic
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Putnam and Baird is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Multi Cap Growth and Baird Strategic Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baird Strategic Municipal and Putnam Multi-cap 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 Multi Cap Growth are associated (or correlated) with Baird Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baird Strategic Municipal has no effect on the direction of Putnam Multi-cap i.e., Putnam Multi-cap and Baird Strategic go up and down completely randomly.
Pair Corralation between Putnam Multi-cap and Baird Strategic
Assuming the 90 days horizon Putnam Multi Cap Growth is expected to under-perform the Baird Strategic. In addition to that, Putnam Multi-cap is 5.24 times more volatile than Baird Strategic Municipal. It trades about -0.12 of its total potential returns per unit of risk. Baird Strategic Municipal is currently generating about 0.17 per unit of volatility. If you would invest 1,027 in Baird Strategic Municipal on November 27, 2024 and sell it today you would earn a total of 5.00 from holding Baird Strategic Municipal or generate 0.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Multi Cap Growth vs. Baird Strategic Municipal
Performance |
| Timeline |
| Putnam Multi Cap |
| Baird Strategic Municipal |
Putnam Multi-cap and Baird Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Multi-cap and Baird Strategic
The main advantage of trading using opposite Putnam Multi-cap and Baird Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Multi-cap position performs unexpectedly, Baird Strategic 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 Baird Strategic will offset losses from the drop in Baird Strategic's long position.| Putnam Multi-cap vs. Calvert High Yield | Putnam Multi-cap vs. Virtus High Yield | Putnam Multi-cap vs. Neuberger Berman Income | Putnam Multi-cap vs. Voya High Yield |
| Baird Strategic vs. Calvert Large Cap | Baird Strategic vs. Wasatch Large Cap | Baird Strategic vs. Fisher Large Cap | Baird Strategic vs. Ab Large Cap |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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