Correlation Between Praxis Small and Oakmark Bond
Can any of the company-specific risk be diversified away by investing in both Praxis Small and Oakmark Bond 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 Oakmark Bond 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 Oakmark Bond, you can compare the effects of market volatilities on Praxis Small and Oakmark Bond 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 Oakmark Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Praxis Small and Oakmark Bond.
Diversification Opportunities for Praxis Small and Oakmark Bond
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PRAXIS and Oakmark is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Praxis Small Cap and Oakmark Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark Bond 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 Oakmark Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark Bond has no effect on the direction of Praxis Small i.e., Praxis Small and Oakmark Bond go up and down completely randomly.
Pair Corralation between Praxis Small and Oakmark Bond
Assuming the 90 days horizon Praxis Small Cap is expected to generate 4.03 times more return on investment than Oakmark Bond. However, Praxis Small is 4.03 times more volatile than Oakmark Bond. It trades about 0.06 of its potential returns per unit of risk. Oakmark Bond is currently generating about -0.04 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 | 99.04% |
| Values | Daily Returns |
Praxis Small Cap vs. Oakmark Bond
Performance |
| Timeline |
| Praxis Small Cap |
| Oakmark Bond |
Praxis Small and Oakmark Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Praxis Small and Oakmark Bond
The main advantage of trading using opposite Praxis Small and Oakmark Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Praxis Small position performs unexpectedly, Oakmark Bond 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 Oakmark Bond will offset losses from the drop in Oakmark Bond'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 |
| Oakmark Bond vs. Oakmark International Fund | Oakmark Bond vs. Oakmark Fund Advisor | Oakmark Bond vs. Oakmark Select Fund | Oakmark Bond vs. Oakmark Global Select |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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