Correlation Between Tax-managed and Praxis Growth
Can any of the company-specific risk be diversified away by investing in both Tax-managed 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 Tax-managed and Praxis Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tax Managed Large Cap and Praxis Growth Index, you can compare the effects of market volatilities on Tax-managed 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 Tax-managed with a short position of Praxis Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tax-managed and Praxis Growth.
Diversification Opportunities for Tax-managed and Praxis Growth
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tax-managed and Praxis is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Tax Managed Large Cap 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 Tax-managed 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 Tax Managed Large Cap 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 Tax-managed i.e., Tax-managed and Praxis Growth go up and down completely randomly.
Pair Corralation between Tax-managed and Praxis Growth
Assuming the 90 days horizon Tax Managed Large Cap is expected to generate 0.74 times more return on investment than Praxis Growth. However, Tax Managed Large Cap is 1.34 times less risky than Praxis Growth. It trades about -0.13 of its potential returns per unit of risk. Praxis Growth Index is currently generating about -0.21 per unit of risk. If you would invest 8,710 in Tax Managed Large Cap on October 14, 2024 and sell it today you would lose (199.00) from holding Tax Managed Large Cap or give up 2.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tax Managed Large Cap vs. Praxis Growth Index
Performance |
| Timeline |
| Tax Managed Large |
| Praxis Growth Index |
Tax-managed and Praxis Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tax-managed and Praxis Growth
The main advantage of trading using opposite Tax-managed and Praxis Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tax-managed 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.| Tax-managed vs. Voya Government Money | Tax-managed vs. Hsbc Treasury Money | Tax-managed vs. Prudential Government Money | Tax-managed vs. Hewitt Money Market |
| Praxis Growth vs. Tax Managed Large Cap | Praxis Growth vs. Fmasx | Praxis Growth vs. Eic Value Fund | Praxis Growth vs. Kirr Marbach Partners |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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