Correlation Between Praxis Value and Alphacentric Symmetry

Can any of the company-specific risk be diversified away by investing in both Praxis Value and Alphacentric Symmetry 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 Value and Alphacentric Symmetry into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Praxis Value Index and Alphacentric Symmetry Strategy, you can compare the effects of market volatilities on Praxis Value and Alphacentric Symmetry 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 Value with a short position of Alphacentric Symmetry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Praxis Value and Alphacentric Symmetry.

Diversification Opportunities for Praxis Value and Alphacentric Symmetry

0.21

Correlation Coefficient

Praxis Value  Alphacentric Symmetry

Modest diversification

The 3 months correlation between Praxis and Alphacentric is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Praxis Value Index and Alphacentric Symmetry Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphacentric Symmetry and Praxis Value 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 Value Index are associated (or correlated) with Alphacentric Symmetry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alphacentric Symmetry has no effect on the direction of Praxis Value i.e., Praxis Value and Alphacentric Symmetry go up and down completely randomly.

Pair Corralation between Praxis Value and Alphacentric Symmetry

Assuming the 90 days horizon Praxis Value Index is expected to under-perform the Alphacentric Symmetry. In addition to that, Praxis Value is 4.36 times more volatile than Alphacentric Symmetry Strategy. It trades about -0.31 of its total potential returns per unit of risk. Alphacentric Symmetry Strategy is currently generating about -0.22 per unit of volatility. If you would invest  1,260  in Alphacentric Symmetry Strategy on October 11, 2024 and sell it today you would lose (24.00) from holding Alphacentric Symmetry Strategy or give up 1.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Praxis Value Index  vs.  Alphacentric Symmetry Strategy

Praxis Value Index

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Praxis Value Index has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Alphacentric Symmetry

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Alphacentric Symmetry Strategy are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Alphacentric Symmetry is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Praxis Value and Alphacentric Symmetry

The main advantage of trading using opposite Praxis Value and Alphacentric Symmetry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Praxis Value position performs unexpectedly, Alphacentric Symmetry 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 Alphacentric Symmetry will offset losses from the drop in Alphacentric Symmetry's long position.

The idea behind Praxis Value Index and Alphacentric Symmetry Strategy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.