Correlation Between Pax Balanced and Pax Esg

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

By analyzing existing cross correlation between Pax Balanced Fund and Pax Esg Beta, you can compare the effects of market volatilities on Pax Balanced and Pax Esg 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 Pax Balanced with a short position of Pax Esg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pax Balanced and Pax Esg.

Diversification Opportunities for Pax Balanced and Pax Esg

0.69

Correlation Coefficient

Pax Balanced  Pax Esg

Poor diversification

The 3 months correlation between Pax and Pax is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Pax Balanced Fund and Pax Esg Beta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pax Esg Beta and Pax Balanced 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 Pax Balanced Fund are associated (or correlated) with Pax Esg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pax Esg Beta has no effect on the direction of Pax Balanced i.e., Pax Balanced and Pax Esg go up and down completely randomly.

Pair Corralation between Pax Balanced and Pax Esg

If you would invest  0.00  in Pax Esg Beta on October 20, 2024 and sell it today you would earn a total of  0.00  from holding Pax Esg Beta or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	5.0%
Values	Daily Returns

Pax Balanced Fund  vs.  Pax Esg Beta

Pax Balanced

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pax Balanced Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Pax Balanced is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pax Esg Beta

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pax Esg Beta has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Pax Balanced and Pax Esg

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

The idea behind Pax Balanced Fund and Pax Esg Beta 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.