Correlation Between Praxis International and Praxis Growth
Can any of the company-specific risk be diversified away by investing in both Praxis International and Praxis Growth 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 International and Praxis Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Praxis International Index and Praxis Growth Index, you can compare the effects of market volatilities on Praxis International and Praxis Growth 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 International with a short position of Praxis Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Praxis International and Praxis Growth.
Diversification Opportunities for Praxis International and Praxis Growth
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Praxis and Praxis is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Praxis International Index and Praxis Growth Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Praxis Growth Index and Praxis International 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 International Index are associated (or correlated) with Praxis Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Praxis Growth Index has no effect on the direction of Praxis International i.e., Praxis International and Praxis Growth go up and down completely randomly.
Pair Corralation between Praxis International and Praxis Growth
Assuming the 90 days horizon Praxis International is expected to generate 2.46 times less return on investment than Praxis Growth. But when comparing it to its historical volatility, Praxis International Index is 1.25 times less risky than Praxis Growth. It trades about 0.05 of its potential returns per unit of risk. Praxis Growth Index is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,371 in Praxis Growth Index on September 1, 2024 and sell it today you would earn a total of 1,511 from holding Praxis Growth Index or generate 44.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Praxis International Index vs. Praxis Growth Index
Performance |
| Timeline |
| Praxis International |
| Praxis Growth Index |
Praxis International and Praxis Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Praxis International and Praxis Growth
The main advantage of trading using opposite Praxis International and Praxis Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Praxis International position performs unexpectedly, Praxis Growth 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 Praxis Growth will offset losses from the drop in Praxis Growth's long position.| Praxis International vs. California Bond Fund | Praxis International vs. Federated Ultrashort Bond | Praxis International vs. T Rowe Price | Praxis International vs. Thrivent Income Fund |
| Praxis Growth vs. The Gabelli Equity | Praxis Growth vs. Cutler Equity | Praxis Growth vs. Ms Global Fixed | Praxis Growth vs. Icon Equity Income |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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