Correlation Between Cref Money and Putnam Floating
Can any of the company-specific risk be diversified away by investing in both Cref Money and Putnam Floating 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 Cref Money and Putnam Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cref Money Market and Putnam Floating Rate, you can compare the effects of market volatilities on Cref Money and Putnam Floating 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 Cref Money with a short position of Putnam Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cref Money and Putnam Floating.
Diversification Opportunities for Cref Money and Putnam Floating
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Cref and Putnam is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Cref Money Market and Putnam Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Floating Rate and Cref Money 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 Cref Money Market are associated (or correlated) with Putnam Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Floating Rate has no effect on the direction of Cref Money i.e., Cref Money and Putnam Floating go up and down completely randomly.
Pair Corralation between Cref Money and Putnam Floating
Assuming the 90 days trading horizon Cref Money is expected to generate 1.75 times less return on investment than Putnam Floating. But when comparing it to its historical volatility, Cref Money Market is 7.27 times less risky than Putnam Floating. It trades about 0.81 of its potential returns per unit of risk. Putnam Floating Rate is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 670.00 in Putnam Floating Rate on November 29, 2024 and sell it today you would earn a total of 128.00 from holding Putnam Floating Rate or generate 19.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 97.16% |
| Values | Daily Returns |
Cref Money Market vs. Putnam Floating Rate
Performance |
| Timeline |
| Cref Money Market |
| Putnam Floating Rate |
Cref Money and Putnam Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cref Money and Putnam Floating
The main advantage of trading using opposite Cref Money and Putnam Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cref Money position performs unexpectedly, Putnam Floating 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 Floating will offset losses from the drop in Putnam Floating's long position.| Cref Money vs. Touchstone Small Cap | Cref Money vs. Ep Emerging Markets | Cref Money vs. Ab Small Cap | Cref Money vs. United Kingdom Small |
| Putnam Floating vs. The Hartford Servative | Putnam Floating vs. Growth Allocation Fund | Putnam Floating vs. T Rowe Price | Putnam Floating vs. Gmo Asset Allocation |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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