Correlation Between Encore Capital and Praxsyn Corp
Can any of the company-specific risk be diversified away by investing in both Encore Capital and Praxsyn Corp 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 Encore Capital and Praxsyn Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Encore Capital Group and Praxsyn Corp, you can compare the effects of market volatilities on Encore Capital and Praxsyn Corp 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 Encore Capital with a short position of Praxsyn Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Encore Capital and Praxsyn Corp.
Diversification Opportunities for Encore Capital and Praxsyn Corp
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Encore and Praxsyn is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Encore Capital Group and Praxsyn Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Praxsyn Corp and Encore Capital 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 Encore Capital Group are associated (or correlated) with Praxsyn Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Praxsyn Corp has no effect on the direction of Encore Capital i.e., Encore Capital and Praxsyn Corp go up and down completely randomly.
Pair Corralation between Encore Capital and Praxsyn Corp
Given the investment horizon of 90 days Encore Capital is expected to generate 453.63 times less return on investment than Praxsyn Corp. But when comparing it to its historical volatility, Encore Capital Group is 40.57 times less risky than Praxsyn Corp. It trades about 0.01 of its potential returns per unit of risk. Praxsyn Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Praxsyn Corp on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Praxsyn Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 51.41% |
| Values | Daily Returns |
Encore Capital Group vs. Praxsyn Corp
Performance |
| Timeline |
| Encore Capital Group |
| Praxsyn Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Encore Capital and Praxsyn Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Encore Capital and Praxsyn Corp
The main advantage of trading using opposite Encore Capital and Praxsyn Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Encore Capital position performs unexpectedly, Praxsyn Corp 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 Praxsyn Corp will offset losses from the drop in Praxsyn Corp's long position.| Encore Capital vs. Visa Class A | Encore Capital vs. PayPal Holdings | Encore Capital vs. Upstart Holdings | Encore Capital vs. Mastercard |
| Praxsyn Corp vs. Artisan Partners Asset | Praxsyn Corp vs. Siriuspoint | Praxsyn Corp vs. Skechers USA | Praxsyn Corp vs. Lincoln Electric Holdings |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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