Correlation Between Praxis Impact and State Street
Can any of the company-specific risk be diversified away by investing in both Praxis Impact and State Street 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 State Street 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 State Street Target, you can compare the effects of market volatilities on Praxis Impact and State Street 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 State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Praxis Impact and State Street.
Diversification Opportunities for Praxis Impact and State Street
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Praxis and State is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Praxis Impact Bond and State Street Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Target 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Target has no effect on the direction of Praxis Impact i.e., Praxis Impact and State Street go up and down completely randomly.
Pair Corralation between Praxis Impact and State Street
Assuming the 90 days horizon Praxis Impact is expected to generate 2.44 times less return on investment than State Street. But when comparing it to its historical volatility, Praxis Impact Bond is 2.78 times less risky than State Street. It trades about 0.17 of its potential returns per unit of risk. State Street Target is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,696 in State Street Target on August 31, 2025 and sell it today you would earn a total of 99.00 from holding State Street Target or generate 5.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Praxis Impact Bond vs. State Street Target
Performance |
| Timeline |
| Praxis Impact Bond |
| State Street Target |
Praxis Impact and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Praxis Impact and State Street
The main advantage of trading using opposite Praxis Impact and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Praxis Impact position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street's long position.| Praxis Impact vs. Davis Financial Fund | Praxis Impact vs. Vanguard Financials Index | Praxis Impact vs. Mesirow Financial Small | Praxis Impact vs. Putnam Global Financials |
| State Street vs. Massmutual Premier Diversified | State Street vs. T Rowe Price | State Street vs. Ultra Short Fixed Income | State Street vs. L Abbett Fundamental |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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