Correlation Between Praxis Growth and Westwood High
Can any of the company-specific risk be diversified away by investing in both Praxis Growth and Westwood High 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 Westwood High 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 Westwood High Income, you can compare the effects of market volatilities on Praxis Growth and Westwood High 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 Westwood High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Praxis Growth and Westwood High.
Diversification Opportunities for Praxis Growth and Westwood High
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Praxis and Westwood is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Praxis Growth Index and Westwood High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westwood High Income 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 Westwood High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westwood High Income has no effect on the direction of Praxis Growth i.e., Praxis Growth and Westwood High go up and down completely randomly.
Pair Corralation between Praxis Growth and Westwood High
Assuming the 90 days horizon Praxis Growth Index is expected to generate 3.59 times more return on investment than Westwood High. However, Praxis Growth is 3.59 times more volatile than Westwood High Income. It trades about 0.2 of its potential returns per unit of risk. Westwood High Income is currently generating about 0.21 per unit of risk. If you would invest 4,979 in Praxis Growth Index on September 13, 2024 and sell it today you would earn a total of 174.00 from holding Praxis Growth Index or generate 3.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Praxis Growth Index vs. Westwood High Income
Performance |
| Timeline |
| Praxis Growth Index |
| Westwood High Income |
Praxis Growth and Westwood High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Praxis Growth and Westwood High
The main advantage of trading using opposite Praxis Growth and Westwood High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Praxis Growth position performs unexpectedly, Westwood High 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 Westwood High will offset losses from the drop in Westwood High's long position.| Praxis Growth vs. Precious Metals And | Praxis Growth vs. Oppenheimer Gold Special | Praxis Growth vs. Gold And Precious | Praxis Growth vs. Europac Gold Fund |
| Westwood High vs. Westwood Alternative Income | Westwood High vs. Westwood Income Opportunity | Westwood High vs. Westwood Income Opportunity | Westwood High vs. Westwood Quality Value |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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