Correlation Between Praxis Growth and Touchstone Sustainability
Can any of the company-specific risk be diversified away by investing in both Praxis Growth and Touchstone Sustainability 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 Touchstone Sustainability 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 Touchstone Sustainability And, you can compare the effects of market volatilities on Praxis Growth and Touchstone Sustainability 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 Touchstone Sustainability. Check out your portfolio center. Please also check ongoing floating volatility patterns of Praxis Growth and Touchstone Sustainability.
Diversification Opportunities for Praxis Growth and Touchstone Sustainability
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Praxis and Touchstone is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Praxis Growth Index and Touchstone Sustainability And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Sustainability 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 Touchstone Sustainability. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Sustainability has no effect on the direction of Praxis Growth i.e., Praxis Growth and Touchstone Sustainability go up and down completely randomly.
Pair Corralation between Praxis Growth and Touchstone Sustainability
Assuming the 90 days horizon Praxis Growth Index is expected to generate 1.33 times more return on investment than Touchstone Sustainability. However, Praxis Growth is 1.33 times more volatile than Touchstone Sustainability And. It trades about 0.11 of its potential returns per unit of risk. Touchstone Sustainability And is currently generating about -0.14 per unit of risk. If you would invest 4,747 in Praxis Growth Index on August 29, 2024 and sell it today you would earn a total of 201.00 from holding Praxis Growth Index or generate 4.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Praxis Growth Index vs. Touchstone Sustainability And
Performance |
| Timeline |
| Praxis Growth Index |
| Touchstone Sustainability |
Praxis Growth and Touchstone Sustainability Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Praxis Growth and Touchstone Sustainability
The main advantage of trading using opposite Praxis Growth and Touchstone Sustainability positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Praxis Growth position performs unexpectedly, Touchstone Sustainability 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 Touchstone Sustainability will offset losses from the drop in Touchstone Sustainability's long position.| Praxis Growth vs. Lifestyle Ii Moderate | Praxis Growth vs. Target Retirement 2040 | Praxis Growth vs. Franklin Lifesmart Retirement | Praxis Growth vs. Moderately Aggressive Balanced |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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