Correlation Between Growth Strategy and Praxis Growth
Can any of the company-specific risk be diversified away by investing in both Growth Strategy and Praxis Growth 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 Growth Strategy and Praxis Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Strategy Fund and Praxis Growth Index, you can compare the effects of market volatilities on Growth Strategy and Praxis Growth 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 Growth Strategy with a short position of Praxis Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Strategy and Praxis Growth.
Diversification Opportunities for Growth Strategy and Praxis Growth
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Growth and Praxis is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Growth Strategy Fund and Praxis Growth Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Praxis Growth Index and Growth Strategy 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 Growth Strategy Fund are associated (or correlated) with Praxis Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Praxis Growth Index has no effect on the direction of Growth Strategy i.e., Growth Strategy and Praxis Growth go up and down completely randomly.
Pair Corralation between Growth Strategy and Praxis Growth
Assuming the 90 days horizon Growth Strategy Fund is expected to under-perform the Praxis Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, Growth Strategy Fund is 1.77 times less risky than Praxis Growth. The mutual fund trades about -0.3 of its potential returns per unit of risk. The Praxis Growth Index is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 5,081 in Praxis Growth Index on October 10, 2024 and sell it today you would lose (132.00) from holding Praxis Growth Index or give up 2.6% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Growth Strategy Fund vs. Praxis Growth Index
Performance |
Timeline |
Growth Strategy |
Praxis Growth Index |
Growth Strategy and Praxis Growth Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Growth Strategy and Praxis Growth
The main advantage of trading using opposite Growth Strategy and Praxis Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Strategy position performs unexpectedly, Praxis Growth 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 Praxis Growth will offset losses from the drop in Praxis Growth's long position.Growth Strategy vs. Eagle Mlp Strategy | Growth Strategy vs. Alphacentric Symmetry Strategy | Growth Strategy vs. Balanced Strategy Fund | Growth Strategy vs. Dow 2x Strategy |
Praxis Growth vs. Barings High Yield | Praxis Growth vs. Multisector Bond Sma | Praxis Growth vs. Ft 9331 Corporate | Praxis Growth vs. Versatile Bond Portfolio |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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