Correlation Between Mid Cap and Praxis Growth
Can any of the company-specific risk be diversified away by investing in both Mid Cap 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 Mid Cap and Praxis Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mid Cap Growth and Praxis Growth Index, you can compare the effects of market volatilities on Mid Cap 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 Mid Cap with a short position of Praxis Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid Cap and Praxis Growth.
Diversification Opportunities for Mid Cap and Praxis Growth
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mid and Praxis is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap Growth 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 Mid Cap 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 Mid Cap Growth 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 Mid Cap i.e., Mid Cap and Praxis Growth go up and down completely randomly.
Pair Corralation between Mid Cap and Praxis Growth
Assuming the 90 days horizon Mid Cap Growth is expected to generate 1.18 times more return on investment than Praxis Growth. However, Mid Cap is 1.18 times more volatile than Praxis Growth Index. It trades about 0.39 of its potential returns per unit of risk. Praxis Growth Index is currently generating about 0.07 per unit of risk. If you would invest 3,730 in Mid Cap Growth on August 28, 2024 and sell it today you would earn a total of 411.00 from holding Mid Cap Growth or generate 11.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mid Cap Growth vs. Praxis Growth Index
Performance |
| Timeline |
| Mid Cap Growth |
| Praxis Growth Index |
Mid Cap and Praxis Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mid Cap and Praxis Growth
The main advantage of trading using opposite Mid Cap and Praxis Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid Cap 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.| Mid Cap vs. Touchstone Sustainability And | Mid Cap vs. Growth Opportunities Fund | Mid Cap vs. Total Return Fund | Mid Cap vs. William Blair International |
| Praxis Growth vs. Praxis Small Cap | Praxis Growth vs. Praxis Small Cap | Praxis Growth vs. Praxis International Index | Praxis Growth vs. Praxis Value Index |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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