Correlation Between Praxis Growth and Western Asset
Can any of the company-specific risk be diversified away by investing in both Praxis Growth and Western Asset 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 Western Asset 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 Western Asset Intermediate, you can compare the effects of market volatilities on Praxis Growth and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Praxis Growth and Western Asset.
Diversification Opportunities for Praxis Growth and Western Asset
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Praxis and Western is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Praxis Growth Index and Western Asset Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Interm 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Interm has no effect on the direction of Praxis Growth i.e., Praxis Growth and Western Asset go up and down completely randomly.
Pair Corralation between Praxis Growth and Western Asset
Assuming the 90 days horizon Praxis Growth Index is expected to generate 5.84 times more return on investment than Western Asset. However, Praxis Growth is 5.84 times more volatile than Western Asset Intermediate. It trades about 0.11 of its potential returns per unit of risk. Western Asset Intermediate is currently generating about 0.02 per unit of risk. If you would invest 3,847 in Praxis Growth Index on August 28, 2024 and sell it today you would earn a total of 1,057 from holding Praxis Growth Index or generate 27.48% 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. Western Asset Intermediate
Performance |
| Timeline |
| Praxis Growth Index |
| Western Asset Interm |
Praxis Growth and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Praxis Growth and Western Asset
The main advantage of trading using opposite Praxis Growth and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Praxis Growth position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset'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 Value Index |
| Western Asset vs. Clearbridge Aggressive Growth | Western Asset vs. Clearbridge Small Cap | Western Asset vs. Qs International Equity | Western Asset vs. Clearbridge Appreciation Fund |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Stocks Directory Find actively traded stocks across global markets |