Correlation Between Praxis Home and Patanjali Foods
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By analyzing existing cross correlation between Praxis Home Retail and Patanjali Foods Limited, you can compare the effects of market volatilities on Praxis Home and Patanjali Foods 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 Home with a short position of Patanjali Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Praxis Home and Patanjali Foods.
Diversification Opportunities for Praxis Home and Patanjali Foods
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Praxis and Patanjali is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Praxis Home Retail and Patanjali Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patanjali Foods and Praxis Home 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 Home Retail are associated (or correlated) with Patanjali Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patanjali Foods has no effect on the direction of Praxis Home i.e., Praxis Home and Patanjali Foods go up and down completely randomly.
Pair Corralation between Praxis Home and Patanjali Foods
Assuming the 90 days trading horizon Praxis Home Retail is expected to generate 1.38 times more return on investment than Patanjali Foods. However, Praxis Home is 1.38 times more volatile than Patanjali Foods Limited. It trades about 0.12 of its potential returns per unit of risk. Patanjali Foods Limited is currently generating about 0.13 per unit of risk. If you would invest 1,525 in Praxis Home Retail on September 3, 2024 and sell it today you would earn a total of 663.00 from holding Praxis Home Retail or generate 43.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Praxis Home Retail vs. Patanjali Foods Limited
Performance |
| Timeline |
| Praxis Home Retail |
| Patanjali Foods |
Praxis Home and Patanjali Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Praxis Home and Patanjali Foods
The main advantage of trading using opposite Praxis Home and Patanjali Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Praxis Home position performs unexpectedly, Patanjali Foods 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 Patanjali Foods will offset losses from the drop in Patanjali Foods' long position.| Praxis Home vs. Bajaj Holdings Investment | Praxis Home vs. Shipping | Praxis Home vs. Indo Borax Chemicals | Praxis Home vs. Kingfa Science Technology |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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