Correlation Between Praxis Growth and Putnam Floating
Can any of the company-specific risk be diversified away by investing in both Praxis Growth 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 Praxis Growth and Putnam Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Praxis Growth Index and Putnam Floating Rate, you can compare the effects of market volatilities on Praxis Growth 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 Praxis Growth with a short position of Putnam Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Praxis Growth and Putnam Floating.
Diversification Opportunities for Praxis Growth and Putnam Floating
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Praxis and Putnam is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Praxis Growth Index 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 Praxis Growth 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 Praxis Growth Index 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 Praxis Growth i.e., Praxis Growth and Putnam Floating go up and down completely randomly.
Pair Corralation between Praxis Growth and Putnam Floating
Assuming the 90 days horizon Praxis Growth Index is expected to generate 8.04 times more return on investment than Putnam Floating. However, Praxis Growth is 8.04 times more volatile than Putnam Floating Rate. It trades about 0.1 of its potential returns per unit of risk. Putnam Floating Rate is currently generating about 0.25 per unit of risk. If you would invest 4,830 in Praxis Growth Index on August 29, 2024 and sell it today you would earn a total of 118.00 from holding Praxis Growth Index or generate 2.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Praxis Growth Index vs. Putnam Floating Rate
Performance |
| Timeline |
| Praxis Growth Index |
| Putnam Floating Rate |
Praxis Growth and Putnam Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Praxis Growth and Putnam Floating
The main advantage of trading using opposite Praxis Growth and Putnam Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Praxis Growth 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.| Praxis Growth vs. Lifestyle Ii Moderate | Praxis Growth vs. Target Retirement 2040 | Praxis Growth vs. Franklin Lifesmart Retirement | Praxis Growth vs. Moderately Aggressive Balanced |
| Putnam Floating vs. Floating Rate Fund | Putnam Floating vs. Lord Abbett Inv | Putnam Floating vs. HUMANA INC | Putnam Floating vs. Aquagold International |
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 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.
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