Correlation Between Praxis Growth and Washington Mutual
Can any of the company-specific risk be diversified away by investing in both Praxis Growth and Washington Mutual 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 Washington Mutual 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 Washington Mutual Investors, you can compare the effects of market volatilities on Praxis Growth and Washington Mutual 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 Washington Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Praxis Growth and Washington Mutual.
Diversification Opportunities for Praxis Growth and Washington Mutual
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Praxis and Washington is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Praxis Growth Index and Washington Mutual Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Washington Mutual 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 Washington Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Washington Mutual has no effect on the direction of Praxis Growth i.e., Praxis Growth and Washington Mutual go up and down completely randomly.
Pair Corralation between Praxis Growth and Washington Mutual
Assuming the 90 days horizon Praxis Growth Index is expected to generate 1.27 times more return on investment than Washington Mutual. However, Praxis Growth is 1.27 times more volatile than Washington Mutual Investors. It trades about 0.38 of its potential returns per unit of risk. Washington Mutual Investors is currently generating about 0.27 per unit of risk. If you would invest 4,860 in Praxis Growth Index on September 18, 2024 and sell it today you would earn a total of 256.00 from holding Praxis Growth Index or generate 5.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Praxis Growth Index vs. Washington Mutual Investors
Performance |
| Timeline |
| Praxis Growth Index |
| Washington Mutual |
Praxis Growth and Washington Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Praxis Growth and Washington Mutual
The main advantage of trading using opposite Praxis Growth and Washington Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Praxis Growth position performs unexpectedly, Washington Mutual 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 Washington Mutual will offset losses from the drop in Washington Mutual's long position.| Praxis Growth vs. Praxis Small Cap | Praxis Growth vs. Praxis Small Cap | Praxis Growth vs. Praxis International Index | Praxis Growth vs. Praxis International Index |
| Washington Mutual vs. Pace Smallmedium Growth | Washington Mutual vs. Franklin Growth Opportunities | Washington Mutual vs. Praxis Growth Index | Washington Mutual vs. T Rowe Price |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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