Correlation Between Baytex Energy and Putnam Floating

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

By analyzing existing cross correlation between Baytex Energy Corp and Putnam Floating Rate, you can compare the effects of market volatilities on Baytex Energy 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 Baytex Energy with a short position of Putnam Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baytex Energy and Putnam Floating.

Diversification Opportunities for Baytex Energy and Putnam Floating

0.72

Correlation Coefficient

Baytex Energy  Putnam Floating

Poor diversification

The 3 months correlation between Baytex and Putnam is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Baytex Energy Corp 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 Baytex Energy 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 Baytex Energy Corp 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 Baytex Energy i.e., Baytex Energy and Putnam Floating go up and down completely randomly.

Pair Corralation between Baytex Energy and Putnam Floating

Considering the 90-day investment horizon Baytex Energy Corp is expected to generate 24.27 times more return on investment than Putnam Floating. However, Baytex Energy is 24.27 times more volatile than Putnam Floating Rate. It trades about 0.17 of its potential returns per unit of risk. Putnam Floating Rate is currently generating about 0.23 per unit of risk. If you would invest  148.00  in Baytex Energy Corp on May 7, 2025 and sell it today you would earn a total of  62.00  from holding Baytex Energy Corp or generate 41.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Baytex Energy Corp  vs.  Putnam Floating Rate

Baytex Energy Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Baytex Energy Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Baytex Energy exhibited solid returns over the last few months and may actually be approaching a breakup point.

Putnam Floating Rate

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Putnam Floating Rate are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Putnam Floating is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Baytex Energy and Putnam Floating

The main advantage of trading using opposite Baytex Energy and Putnam Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baytex Energy 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.

The idea behind Baytex Energy Corp and Putnam Floating Rate 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.