Correlation Between Vy Baron and Praxis Growth
Can any of the company-specific risk be diversified away by investing in both Vy Baron and Praxis Growth 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 Vy Baron and Praxis Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vy Baron Growth and Praxis Growth Index, you can compare the effects of market volatilities on Vy Baron and Praxis Growth 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 Vy Baron with a short position of Praxis Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vy Baron and Praxis Growth.
Diversification Opportunities for Vy Baron and Praxis Growth
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IBSAX and Praxis is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Vy Baron Growth and Praxis Growth Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Praxis Growth Index and Vy Baron 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 Vy Baron Growth are associated (or correlated) with Praxis Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Praxis Growth Index has no effect on the direction of Vy Baron i.e., Vy Baron and Praxis Growth go up and down completely randomly.
Pair Corralation between Vy Baron and Praxis Growth
Assuming the 90 days horizon Vy Baron is expected to generate 12.36 times less return on investment than Praxis Growth. But when comparing it to its historical volatility, Vy Baron Growth is 1.09 times less risky than Praxis Growth. It trades about 0.02 of its potential returns per unit of risk. Praxis Growth Index is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 4,972 in Praxis Growth Index on September 14, 2024 and sell it today you would earn a total of 151.00 from holding Praxis Growth Index or generate 3.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vy Baron Growth vs. Praxis Growth Index
Performance |
| Timeline |
| Vy Baron Growth |
| Praxis Growth Index |
Vy Baron and Praxis Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vy Baron and Praxis Growth
The main advantage of trading using opposite Vy Baron and Praxis Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vy Baron position performs unexpectedly, Praxis Growth 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 Praxis Growth will offset losses from the drop in Praxis Growth's long position.| Vy Baron vs. Voya Bond Index | Vy Baron vs. Voya Bond Index | Vy Baron vs. Voya Limited Maturity | Vy Baron vs. Voya Limited Maturity |
| Praxis Growth vs. T Rowe Price | Praxis Growth vs. Western Asset Diversified | Praxis Growth vs. Ab All Market | Praxis Growth vs. Extended Market Index |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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