Correlation Between Praxis Impact and Strategic Enhanced

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

By analyzing existing cross correlation between Praxis Impact Bond and Strategic Enhanced Yield, you can compare the effects of market volatilities on Praxis Impact and Strategic Enhanced 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 Impact with a short position of Strategic Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Praxis Impact and Strategic Enhanced.

Diversification Opportunities for Praxis Impact and Strategic Enhanced

0.82

Correlation Coefficient

Praxis Impact  Strategic Enhanced

Very poor diversification

The 3 months correlation between Praxis and Strategic is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Praxis Impact Bond and Strategic Enhanced Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Enhanced Yield and Praxis Impact 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 Impact Bond are associated (or correlated) with Strategic Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Enhanced Yield has no effect on the direction of Praxis Impact i.e., Praxis Impact and Strategic Enhanced go up and down completely randomly.

Pair Corralation between Praxis Impact and Strategic Enhanced

Assuming the 90 days horizon Praxis Impact Bond is expected to generate 1.01 times more return on investment than Strategic Enhanced. However, Praxis Impact is 1.01 times more volatile than Strategic Enhanced Yield. It trades about 0.06 of its potential returns per unit of risk. Strategic Enhanced Yield is currently generating about 0.06 per unit of risk. If you would invest  918.00  in Praxis Impact Bond on January 18, 2025 and sell it today you would earn a total of  13.00  from holding Praxis Impact Bond or generate 1.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.41%
Values	Daily Returns

Praxis Impact Bond  vs.  Strategic Enhanced Yield

Praxis Impact Bond

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Praxis Impact Bond are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Praxis Impact is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Strategic Enhanced Yield

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Strategic Enhanced Yield are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Strategic Enhanced 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 Impact and Strategic Enhanced

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

The idea behind Praxis Impact Bond and Strategic Enhanced Yield 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.