Correlation Between Praxis Growth and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Praxis Growth and Emerging Markets 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 Emerging Markets 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 Emerging Markets Fund, you can compare the effects of market volatilities on Praxis Growth and Emerging Markets 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 Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Praxis Growth and Emerging Markets.
Diversification Opportunities for Praxis Growth and Emerging Markets
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Praxis and Emerging is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Praxis Growth Index and Emerging Markets Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets 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 Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets has no effect on the direction of Praxis Growth i.e., Praxis Growth and Emerging Markets go up and down completely randomly.
Pair Corralation between Praxis Growth and Emerging Markets
Assuming the 90 days horizon Praxis Growth Index is expected to generate 1.41 times more return on investment than Emerging Markets. However, Praxis Growth is 1.41 times more volatile than Emerging Markets Fund. It trades about 0.18 of its potential returns per unit of risk. Emerging Markets Fund is currently generating about 0.13 per unit of risk. 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Praxis Growth Index vs. Emerging Markets Fund
Performance |
| Timeline |
| Praxis Growth Index |
| Emerging Markets |
Praxis Growth and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Praxis Growth and Emerging Markets
The main advantage of trading using opposite Praxis Growth and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Praxis Growth position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| Praxis Growth vs. T Rowe Price | Praxis Growth vs. Western Asset Diversified | Praxis Growth vs. Ab All Market | Praxis Growth vs. Extended Market Index |
| Emerging Markets vs. Artisan Small Cap | Emerging Markets vs. Praxis Growth Index | Emerging Markets vs. Rational Defensive Growth | Emerging Markets vs. Small Pany 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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