Correlation Between Vanguard Total and Praxis International

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

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

Diversification Opportunities for Vanguard Total and Praxis International

1.0

Correlation Coefficient

Vanguard Total  Praxis International

No risk reduction

The 3 months correlation between Vanguard and Praxis is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total International and Praxis International Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Praxis International and Vanguard Total 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 Vanguard Total International are associated (or correlated) with Praxis International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Praxis International has no effect on the direction of Vanguard Total i.e., Vanguard Total and Praxis International go up and down completely randomly.

Pair Corralation between Vanguard Total and Praxis International

Assuming the 90 days horizon Vanguard Total International is expected to generate 0.99 times more return on investment than Praxis International. However, Vanguard Total International is 1.01 times less risky than Praxis International. It trades about 0.24 of its potential returns per unit of risk. Praxis International Index is currently generating about 0.23 per unit of risk. If you would invest  3,402  in Vanguard Total International on May 1, 2025 and sell it today you would earn a total of  336.00  from holding Vanguard Total International or generate 9.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.39%
Values	Daily Returns

Vanguard Total International  vs.  Praxis International Index

Vanguard Total Inter

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Total International are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Vanguard Total may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Praxis International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Praxis International Index are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Praxis International may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Vanguard Total and Praxis International

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

The idea behind Vanguard Total International and Praxis International Index 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.