Correlation Between Growth Income and Praxis Growth
Can any of the company-specific risk be diversified away by investing in both Growth Income 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 Growth Income and Praxis Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Income Fund and Praxis Growth Index, you can compare the effects of market volatilities on Growth Income 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 Growth Income with a short position of Praxis Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Income and Praxis Growth.
Diversification Opportunities for Growth Income and Praxis Growth
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Growth and Praxis is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Growth Income Fund 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 Growth Income 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 Growth Income Fund 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 Growth Income i.e., Growth Income and Praxis Growth go up and down completely randomly.
Pair Corralation between Growth Income and Praxis Growth
Assuming the 90 days horizon Growth Income Fund is expected to generate 0.81 times more return on investment than Praxis Growth. However, Growth Income Fund is 1.23 times less risky than Praxis Growth. It trades about 0.22 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 3,348 in Growth Income Fund on August 28, 2024 and sell it today you would earn a total of 138.00 from holding Growth Income Fund or generate 4.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Income Fund vs. Praxis Growth Index
Performance |
| Timeline |
| Growth Income |
| Praxis Growth Index |
Growth Income and Praxis Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Income and Praxis Growth
The main advantage of trading using opposite Growth Income and Praxis Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Income 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.| Growth Income vs. Counterpoint Tactical Municipal | Growth Income vs. Baird Strategic Municipal | Growth Income vs. Ishares Municipal Bond | Growth Income vs. Bbh Intermediate Municipal |
| 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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