Correlation Between Bitcoin and Putnam Multi

Can any of the company-specific risk be diversified away by investing in both Bitcoin and Putnam Multi 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 Bitcoin and Putnam Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bitcoin and Putnam Multi Cap Value, you can compare the effects of market volatilities on Bitcoin and Putnam Multi 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 Bitcoin with a short position of Putnam Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin and Putnam Multi.

Diversification Opportunities for Bitcoin and Putnam Multi

-0.32

Correlation Coefficient

Bitcoin  Putnam Multi

Very good diversification

The 3 months correlation between Bitcoin and Putnam is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Putnam Multi Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Multi Cap and Bitcoin 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 Bitcoin are associated (or correlated) with Putnam Multi. 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 Bitcoin i.e., Bitcoin and Putnam Multi go up and down completely randomly.

Pair Corralation between Bitcoin and Putnam Multi

Assuming the 90 days trading horizon Bitcoin is expected to generate 1.9 times more return on investment than Putnam Multi. However, Bitcoin is 1.9 times more volatile than Putnam Multi Cap Value. It trades about 0.21 of its potential returns per unit of risk. Putnam Multi Cap Value is currently generating about -0.08 per unit of risk. If you would invest  6,251,742  in Bitcoin on October 10, 2024 and sell it today you would earn a total of  3,249,252  from holding Bitcoin or generate 51.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

Bitcoin  vs.  Putnam Multi Cap Value

Bitcoin

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Bitcoin exhibited solid returns over the last few months and may actually be approaching a breakup point.

Putnam Multi Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Putnam Multi Cap Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Bitcoin and Putnam Multi

The main advantage of trading using opposite Bitcoin and Putnam Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin position performs unexpectedly, Putnam Multi 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 will offset losses from the drop in Putnam Multi's long position.

The idea behind Bitcoin and Putnam Multi Cap Value pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..