Correlation Between Short Nasdaq-100 and Praxis Growth
Can any of the company-specific risk be diversified away by investing in both Short Nasdaq-100 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 Short Nasdaq-100 and Praxis Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Short Nasdaq 100 Profund and Praxis Growth Index, you can compare the effects of market volatilities on Short Nasdaq-100 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 Short Nasdaq-100 with a short position of Praxis Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Short Nasdaq-100 and Praxis Growth.
Diversification Opportunities for Short Nasdaq-100 and Praxis Growth
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Short and Praxis is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Short Nasdaq 100 Profund 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 Short Nasdaq-100 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 Short Nasdaq 100 Profund 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 Short Nasdaq-100 i.e., Short Nasdaq-100 and Praxis Growth go up and down completely randomly.
Pair Corralation between Short Nasdaq-100 and Praxis Growth
Assuming the 90 days horizon Short Nasdaq 100 Profund is expected to generate 1.99 times more return on investment than Praxis Growth. However, Short Nasdaq-100 is 1.99 times more volatile than Praxis Growth Index. It trades about -0.07 of its potential returns per unit of risk. Praxis Growth Index is currently generating about -0.22 per unit of risk. If you would invest 3,761 in Short Nasdaq 100 Profund on October 16, 2024 and sell it today you would lose (141.00) from holding Short Nasdaq 100 Profund or give up 3.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Short Nasdaq 100 Profund vs. Praxis Growth Index
Performance |
| Timeline |
| Short Nasdaq 100 |
| Praxis Growth Index |
Short Nasdaq-100 and Praxis Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Short Nasdaq-100 and Praxis Growth
The main advantage of trading using opposite Short Nasdaq-100 and Praxis Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Short Nasdaq-100 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.| Short Nasdaq-100 vs. Short Real Estate | Short Nasdaq-100 vs. Short Real Estate | Short Nasdaq-100 vs. Ultrashort Mid Cap Profund | Short Nasdaq-100 vs. Ultrashort Mid Cap Profund |
| Praxis Growth vs. Needham Aggressive Growth | Praxis Growth vs. Millerhoward High Income | Praxis Growth vs. Lord Abbett Short | Praxis Growth vs. Artisan High 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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