Correlation Between Western Asset and Praxis Growth
Can any of the company-specific risk be diversified away by investing in both Western Asset 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 Western Asset and Praxis Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset E and Praxis Growth Index, you can compare the effects of market volatilities on Western Asset 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 Western Asset with a short position of Praxis Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Praxis Growth.
Diversification Opportunities for Western Asset and Praxis Growth
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Western and Praxis is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset E 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 Western Asset 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 Western Asset E 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 Western Asset i.e., Western Asset and Praxis Growth go up and down completely randomly.
Pair Corralation between Western Asset and Praxis Growth
Assuming the 90 days horizon Western Asset is expected to generate 6.35 times less return on investment than Praxis Growth. But when comparing it to its historical volatility, Western Asset E is 2.71 times less risky than Praxis Growth. It trades about 0.09 of its potential returns per unit of risk. Praxis Growth Index is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 4,979 in Praxis Growth Index on September 13, 2024 and sell it today you would earn a total of 174.00 from holding Praxis Growth Index or generate 3.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Western Asset E vs. Praxis Growth Index
Performance |
| Timeline |
| Western Asset E |
| Praxis Growth Index |
Western Asset and Praxis Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Praxis Growth
The main advantage of trading using opposite Western Asset and Praxis Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset 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.| Western Asset vs. Clearbridge Aggressive Growth | Western Asset vs. Clearbridge Small Cap | Western Asset vs. Qs International Equity | Western Asset vs. Clearbridge Appreciation Fund |
| Praxis Growth vs. Precious Metals And | Praxis Growth vs. Oppenheimer Gold Special | Praxis Growth vs. Gold And Precious | Praxis Growth vs. Europac Gold Fund |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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