Correlation Between Praxis Small and Fidelity Stock
Can any of the company-specific risk be diversified away by investing in both Praxis Small and Fidelity Stock 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 Small and Fidelity Stock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Praxis Small Cap and Fidelity Stock Selector, you can compare the effects of market volatilities on Praxis Small and Fidelity Stock 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 Small with a short position of Fidelity Stock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Praxis Small and Fidelity Stock.
Diversification Opportunities for Praxis Small and Fidelity Stock
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PRAXIS and Fidelity is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Praxis Small Cap and Fidelity Stock Selector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Stock Selector and Praxis Small 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 Small Cap are associated (or correlated) with Fidelity Stock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Stock Selector has no effect on the direction of Praxis Small i.e., Praxis Small and Fidelity Stock go up and down completely randomly.
Pair Corralation between Praxis Small and Fidelity Stock
Assuming the 90 days horizon Praxis Small Cap is expected to generate 1.22 times more return on investment than Fidelity Stock. However, Praxis Small is 1.22 times more volatile than Fidelity Stock Selector. It trades about 0.06 of its potential returns per unit of risk. Fidelity Stock Selector is currently generating about 0.06 per unit of risk. If you would invest 1,049 in Praxis Small Cap on November 2, 2024 and sell it today you would earn a total of 72.00 from holding Praxis Small Cap or generate 6.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Praxis Small Cap vs. Fidelity Stock Selector
Performance |
| Timeline |
| Praxis Small Cap |
| Fidelity Stock Selector |
Praxis Small and Fidelity Stock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Praxis Small and Fidelity Stock
The main advantage of trading using opposite Praxis Small and Fidelity Stock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Praxis Small position performs unexpectedly, Fidelity Stock 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 Fidelity Stock will offset losses from the drop in Fidelity Stock's long position.| Praxis Small vs. Aig Government Money | Praxis Small vs. Dws Government Money | Praxis Small vs. Vanguard Money Market | Praxis Small vs. Elfun Government Money |
| Fidelity Stock vs. Fidelity Freedom 2015 | Fidelity Stock vs. Fidelity Puritan Fund | Fidelity Stock vs. Fidelity Puritan Fund | Fidelity Stock vs. Fidelity Pennsylvania Municipal |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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