Correlation Between Putnam Floating and Midas Fund
Can any of the company-specific risk be diversified away by investing in both Putnam Floating and Midas 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 Floating and Midas Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Floating Rate and Midas Fund Midas, you can compare the effects of market volatilities on Putnam Floating and Midas 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 Floating with a short position of Midas Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Floating and Midas Fund.
Diversification Opportunities for Putnam Floating and Midas Fund
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Putnam and Midas is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Floating Rate and Midas Fund Midas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midas Fund Midas and Putnam Floating 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 Floating Rate are associated (or correlated) with Midas Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midas Fund Midas has no effect on the direction of Putnam Floating i.e., Putnam Floating and Midas Fund go up and down completely randomly.
Pair Corralation between Putnam Floating and Midas Fund
Assuming the 90 days horizon Putnam Floating is expected to generate 18.7 times less return on investment than Midas Fund. But when comparing it to its historical volatility, Putnam Floating Rate is 15.62 times less risky than Midas Fund. It trades about 0.08 of its potential returns per unit of risk. Midas Fund Midas is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 133.00 in Midas Fund Midas on December 5, 2024 and sell it today you would earn a total of 12.00 from holding Midas Fund Midas or generate 9.02% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Putnam Floating Rate vs. Midas Fund Midas
Performance |
Timeline |
Putnam Floating Rate |
Midas Fund Midas |
Putnam Floating and Midas Fund Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Putnam Floating and Midas Fund
The main advantage of trading using opposite Putnam Floating and Midas Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Floating position performs unexpectedly, Midas 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 Midas Fund will offset losses from the drop in Midas Fund's long position.Putnam Floating vs. Government Securities Fund | Putnam Floating vs. Dunham Porategovernment Bond | Putnam Floating vs. Blackrock Government Bond | Putnam Floating vs. Western Asset Premier |
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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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