Correlation Between Praxis Home and Emkay Global

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

By analyzing existing cross correlation between Praxis Home Retail and Emkay Global Financial, you can compare the effects of market volatilities on Praxis Home and Emkay Global 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 Home with a short position of Emkay Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Praxis Home and Emkay Global.

Diversification Opportunities for Praxis Home and Emkay Global

-0.5

Correlation Coefficient

Praxis Home  Emkay Global

Very good diversification

The 3 months correlation between Praxis and Emkay is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Praxis Home Retail and Emkay Global Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emkay Global Financial and Praxis Home 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 Home Retail are associated (or correlated) with Emkay Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emkay Global Financial has no effect on the direction of Praxis Home i.e., Praxis Home and Emkay Global go up and down completely randomly.

Pair Corralation between Praxis Home and Emkay Global

Assuming the 90 days trading horizon Praxis Home Retail is expected to under-perform the Emkay Global. In addition to that, Praxis Home is 1.26 times more volatile than Emkay Global Financial. It trades about -0.15 of its total potential returns per unit of risk. Emkay Global Financial is currently generating about 0.03 per unit of volatility. If you would invest  27,239  in Emkay Global Financial on October 22, 2024 and sell it today you would earn a total of  731.00  from holding Emkay Global Financial or generate 2.68% return on investment over 90 days.

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

Praxis Home Retail  vs.  Emkay Global Financial

Praxis Home Retail

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Praxis Home Retail has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat 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 company investors.

Emkay Global Financial

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Emkay Global Financial are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward-looking signals, Emkay Global is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Praxis Home and Emkay Global

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

The idea behind Praxis Home Retail and Emkay Global Financial 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.