Correlation Between Praxis Home and Uniinfo Telecom

Can any of the company-specific risk be diversified away by investing in both Praxis Home and Uniinfo Telecom 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 Uniinfo Telecom 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 Uniinfo Telecom Services, you can compare the effects of market volatilities on Praxis Home and Uniinfo Telecom 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 Uniinfo Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Praxis Home and Uniinfo Telecom.

Diversification Opportunities for Praxis Home and Uniinfo Telecom

0.84

Correlation Coefficient

Praxis Home  Uniinfo Telecom

Very poor diversification

The 3 months correlation between Praxis and Uniinfo is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Praxis Home Retail and Uniinfo Telecom Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniinfo Telecom Services 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 Uniinfo Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniinfo Telecom Services has no effect on the direction of Praxis Home i.e., Praxis Home and Uniinfo Telecom go up and down completely randomly.

Pair Corralation between Praxis Home and Uniinfo Telecom

Assuming the 90 days trading horizon Praxis Home Retail is expected to generate 0.78 times more return on investment than Uniinfo Telecom. However, Praxis Home Retail is 1.29 times less risky than Uniinfo Telecom. It trades about -0.35 of its potential returns per unit of risk. Uniinfo Telecom Services is currently generating about -0.3 per unit of risk. If you would invest  2,006  in Praxis Home Retail on December 26, 2024 and sell it today you would lose (982.00) from holding Praxis Home Retail or give up 48.95% of portfolio value over 90 days.

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

Praxis Home Retail  vs.  Uniinfo Telecom Services

Praxis Home Retail

Risk-Adjusted Performance

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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Uniinfo Telecom Services

Risk-Adjusted Performance

Very Weak

Over the last 90 days Uniinfo Telecom Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Praxis Home and Uniinfo Telecom

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

The idea behind Praxis Home Retail and Uniinfo Telecom Services 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.