Correlation Between Sp Midcap and Putnam Floating
Can any of the company-specific risk be diversified away by investing in both Sp Midcap 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 Sp Midcap and Putnam Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sp Midcap Index and Putnam Floating Rate, you can compare the effects of market volatilities on Sp Midcap 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 Sp Midcap with a short position of Putnam Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sp Midcap and Putnam Floating.
Diversification Opportunities for Sp Midcap and Putnam Floating
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPMIX and Putnam is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Sp Midcap Index 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 Sp Midcap 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 Sp Midcap Index 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 Sp Midcap i.e., Sp Midcap and Putnam Floating go up and down completely randomly.
Pair Corralation between Sp Midcap and Putnam Floating
Assuming the 90 days horizon Sp Midcap Index is expected to generate 7.7 times more return on investment than Putnam Floating. However, Sp Midcap is 7.7 times more volatile than Putnam Floating Rate. It trades about 0.31 of its potential returns per unit of risk. Putnam Floating Rate is currently generating about 0.22 per unit of risk. If you would invest 2,796 in Sp Midcap Index on August 27, 2024 and sell it today you would earn a total of 225.00 from holding Sp Midcap Index or generate 8.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sp Midcap Index vs. Putnam Floating Rate
Performance |
| Timeline |
| Sp Midcap Index |
| Putnam Floating Rate |
Sp Midcap and Putnam Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sp Midcap and Putnam Floating
The main advantage of trading using opposite Sp Midcap and Putnam Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sp Midcap 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.| Sp Midcap vs. Wisdomtree Siegel Moderate | Sp Midcap vs. Tiaa Cref Lifecycle Retirement | Sp Midcap vs. Saat Moderate Strategy | Sp Midcap vs. Pro Blend Moderate Term |
| Putnam Floating vs. Putnam Equity Income | Putnam Floating vs. Putnam Tax Exempt | Putnam Floating vs. Putnam High Yield | Putnam Floating vs. Putnam Floating Rate |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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