Correlation Between Praxis Growth and Artisan Small
Can any of the company-specific risk be diversified away by investing in both Praxis Growth and Artisan Small 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 Praxis Growth and Artisan Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Praxis Growth Index and Artisan Small Cap, you can compare the effects of market volatilities on Praxis Growth and Artisan Small 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 Praxis Growth with a short position of Artisan Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Praxis Growth and Artisan Small.
Diversification Opportunities for Praxis Growth and Artisan Small
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Praxis and Artisan is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Praxis Growth Index and Artisan Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Small Cap and Praxis Growth 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 Praxis Growth Index are associated (or correlated) with Artisan Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Small Cap has no effect on the direction of Praxis Growth i.e., Praxis Growth and Artisan Small go up and down completely randomly.
Pair Corralation between Praxis Growth and Artisan Small
Assuming the 90 days horizon Praxis Growth Index is expected to generate 0.63 times more return on investment than Artisan Small. However, Praxis Growth Index is 1.58 times less risky than Artisan Small. It trades about 0.21 of its potential returns per unit of risk. Artisan Small Cap is currently generating about -0.27 per unit of risk. If you would invest 4,904 in Praxis Growth Index on September 25, 2024 and sell it today you would earn a total of 218.00 from holding Praxis Growth Index or generate 4.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Praxis Growth Index vs. Artisan Small Cap
Performance |
Timeline |
Praxis Growth Index |
Artisan Small Cap |
Praxis Growth and Artisan Small Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Praxis Growth and Artisan Small
The main advantage of trading using opposite Praxis Growth and Artisan Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Praxis Growth position performs unexpectedly, Artisan Small 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 Artisan Small will offset losses from the drop in Artisan Small's long position.Praxis Growth vs. Praxis Small Cap | Praxis Growth vs. Praxis Small Cap | Praxis Growth vs. Praxis International Index | Praxis Growth vs. Praxis International Index |
Artisan Small vs. Artisan Global Opportunities | Artisan Small vs. Artisan Mid Cap | Artisan Small vs. Wasatch Ultra Growth | Artisan Small vs. Artisan International Value |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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