Correlation Between Putnam Small and Muhlenkamp Fund
Can any of the company-specific risk be diversified away by investing in both Putnam Small and Muhlenkamp Fund 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 Small and Muhlenkamp Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Small Cap and Muhlenkamp Fund Institutional, you can compare the effects of market volatilities on Putnam Small and Muhlenkamp Fund 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 Small with a short position of Muhlenkamp Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Small and Muhlenkamp Fund.
Diversification Opportunities for Putnam Small and Muhlenkamp Fund
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Putnam and Muhlenkamp is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Small Cap and Muhlenkamp Fund Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muhlenkamp Fund Inst and Putnam Small 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 Small Cap are associated (or correlated) with Muhlenkamp Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muhlenkamp Fund Inst has no effect on the direction of Putnam Small i.e., Putnam Small and Muhlenkamp Fund go up and down completely randomly.
Pair Corralation between Putnam Small and Muhlenkamp Fund
Assuming the 90 days horizon Putnam Small Cap is expected to generate 1.57 times more return on investment than Muhlenkamp Fund. However, Putnam Small is 1.57 times more volatile than Muhlenkamp Fund Institutional. It trades about 0.28 of its potential returns per unit of risk. Muhlenkamp Fund Institutional is currently generating about 0.23 per unit of risk. If you would invest 1,636 in Putnam Small Cap on August 30, 2024 and sell it today you would earn a total of 149.00 from holding Putnam Small Cap or generate 9.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Small Cap vs. Muhlenkamp Fund Institutional
Performance |
| Timeline |
| Putnam Small Cap |
| Muhlenkamp Fund Inst |
Putnam Small and Muhlenkamp Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Small and Muhlenkamp Fund
The main advantage of trading using opposite Putnam Small and Muhlenkamp Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Small position performs unexpectedly, Muhlenkamp Fund 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 Muhlenkamp Fund will offset losses from the drop in Muhlenkamp Fund's long position.| Putnam Small vs. Vanguard Small Cap Value | Putnam Small vs. Vanguard Small Cap Value | Putnam Small vs. American Beacon Small |
| Muhlenkamp Fund vs. Dodge Cox Stock | Muhlenkamp Fund vs. American Mutual Fund | Muhlenkamp Fund vs. American Funds American | Muhlenkamp Fund vs. American Funds American |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |