Correlation Between Praxis Growth and Putnam Multicap
Can any of the company-specific risk be diversified away by investing in both Praxis Growth and Putnam Multicap 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 Multicap 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 Multicap Core, you can compare the effects of market volatilities on Praxis Growth and Putnam Multicap 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 Multicap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Praxis Growth and Putnam Multicap.
Diversification Opportunities for Praxis Growth and Putnam Multicap
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Praxis and Putnam is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Praxis Growth Index and Putnam Multicap Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Multicap Core 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 Multicap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Multicap Core has no effect on the direction of Praxis Growth i.e., Praxis Growth and Putnam Multicap go up and down completely randomly.
Pair Corralation between Praxis Growth and Putnam Multicap
Assuming the 90 days horizon Praxis Growth Index is expected to generate 1.2 times more return on investment than Putnam Multicap. However, Praxis Growth is 1.2 times more volatile than Putnam Multicap Core. It trades about 0.11 of its potential returns per unit of risk. Putnam Multicap Core is currently generating about 0.11 per unit of risk. If you would invest 4,781 in Praxis Growth Index on August 24, 2024 and sell it today you would earn a total of 123.00 from holding Praxis Growth Index or generate 2.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Praxis Growth Index vs. Putnam Multicap Core
Performance |
| Timeline |
| Praxis Growth Index |
| Putnam Multicap Core |
Praxis Growth and Putnam Multicap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Praxis Growth and Putnam Multicap
The main advantage of trading using opposite Praxis Growth and Putnam Multicap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Praxis Growth position performs unexpectedly, Putnam Multicap 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 Multicap will offset losses from the drop in Putnam Multicap's long position.| Praxis Growth vs. HUMANA INC | Praxis Growth vs. Aquagold International | Praxis Growth vs. Barloworld Ltd ADR | Praxis Growth vs. Morningstar Unconstrained Allocation |
| Putnam Multicap vs. Victory Rs Growth | Putnam Multicap vs. Growth Fund Of | Putnam Multicap vs. Praxis Growth Index | Putnam Multicap vs. Rational Defensive Growth |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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