Correlation Between Praxis Growth and International Equity
Can any of the company-specific risk be diversified away by investing in both Praxis Growth and International Equity 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 International Equity 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 International Equity Index, you can compare the effects of market volatilities on Praxis Growth and International Equity 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 International Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Praxis Growth and International Equity.
Diversification Opportunities for Praxis Growth and International Equity
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Praxis and International is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Praxis Growth Index and International Equity Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Equity 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 International Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Equity has no effect on the direction of Praxis Growth i.e., Praxis Growth and International Equity go up and down completely randomly.
Pair Corralation between Praxis Growth and International Equity
Assuming the 90 days horizon Praxis Growth Index is expected to generate 1.19 times more return on investment than International Equity. However, Praxis Growth is 1.19 times more volatile than International Equity Index. It trades about 0.12 of its potential returns per unit of risk. International Equity Index is currently generating about 0.06 per unit of risk. If you would invest 2,912 in Praxis Growth Index on September 12, 2024 and sell it today you would earn a total of 2,159 from holding Praxis Growth Index or generate 74.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Praxis Growth Index vs. International Equity Index
Performance |
| Timeline |
| Praxis Growth Index |
| International Equity |
Praxis Growth and International Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Praxis Growth and International Equity
The main advantage of trading using opposite Praxis Growth and International Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Praxis Growth position performs unexpectedly, International Equity 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 International Equity will offset losses from the drop in International Equity's long position.| Praxis Growth vs. American Funds The | Praxis Growth vs. American Funds The | Praxis Growth vs. Growth Fund Of | Praxis Growth vs. Growth Fund Of |
| International Equity vs. Eip Growth And | International Equity vs. Praxis Growth Index | International Equity vs. Artisan Small Cap | International Equity vs. Franklin Growth Opportunities |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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