Correlation Between Praxis Growth and Sa Worldwide

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

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

Diversification Opportunities for Praxis Growth and Sa Worldwide

0.73

Correlation Coefficient

Praxis Growth  Sa Worldwide

Poor diversification

The 3 months correlation between Praxis and SAWMX is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Praxis Growth Index and Sa Worldwide Moderate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sa Worldwide Moderate and Praxis Growth 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 Growth Index are associated (or correlated) with Sa Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sa Worldwide Moderate has no effect on the direction of Praxis Growth i.e., Praxis Growth and Sa Worldwide go up and down completely randomly.

Pair Corralation between Praxis Growth and Sa Worldwide

If you would invest  1,227  in Sa Worldwide Moderate on September 16, 2024 and sell it today you would earn a total of  8.00  from holding Sa Worldwide Moderate or generate 0.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	4.76%
Values	Daily Returns

Praxis Growth Index  vs.  Sa Worldwide Moderate

Praxis Growth Index

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Praxis Growth Index has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly weak technical and fundamental indicators, Praxis Growth may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Sa Worldwide Moderate

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sa Worldwide Moderate are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Sa Worldwide 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 Growth and Sa Worldwide

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

The idea behind Praxis Growth Index and Sa Worldwide Moderate 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.

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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.