Correlation Between Praxis Growth and Sound Shore
Can any of the company-specific risk be diversified away by investing in both Praxis Growth and Sound Shore 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 Sound Shore 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 Sound Shore Fund, you can compare the effects of market volatilities on Praxis Growth and Sound Shore 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 Sound Shore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Praxis Growth and Sound Shore.
Diversification Opportunities for Praxis Growth and Sound Shore
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Praxis and Sound is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Praxis Growth Index and Sound Shore Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sound Shore Fund 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 Sound Shore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sound Shore Fund has no effect on the direction of Praxis Growth i.e., Praxis Growth and Sound Shore go up and down completely randomly.
Pair Corralation between Praxis Growth and Sound Shore
Assuming the 90 days horizon Praxis Growth Index is expected to generate 1.35 times more return on investment than Sound Shore. However, Praxis Growth is 1.35 times more volatile than Sound Shore Fund. It trades about 0.12 of its potential returns per unit of risk. Sound Shore Fund is currently generating about 0.14 per unit of risk. If you would invest 3,642 in Praxis Growth Index on August 26, 2024 and sell it today you would earn a total of 1,262 from holding Praxis Growth Index or generate 34.65% 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. Sound Shore Fund
Performance |
| Timeline |
| Praxis Growth Index |
| Sound Shore Fund |
Praxis Growth and Sound Shore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Praxis Growth and Sound Shore
The main advantage of trading using opposite Praxis Growth and Sound Shore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Praxis Growth position performs unexpectedly, Sound Shore 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 Sound Shore will offset losses from the drop in Sound Shore'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 |
| Sound Shore vs. Hartford Schroders Smallmid | Sound Shore vs. Hartford Schroders Smallmid | Sound Shore vs. Praxis Growth Index | Sound Shore vs. Ab E 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |