Correlation Between Applied Finance and Artisan High
Can any of the company-specific risk be diversified away by investing in both Applied Finance and Artisan High 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 Applied Finance and Artisan High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Finance Explorer and Artisan High Income, you can compare the effects of market volatilities on Applied Finance and Artisan High 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 Applied Finance with a short position of Artisan High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Finance and Artisan High.
Diversification Opportunities for Applied Finance and Artisan High
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Applied and Artisan is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Applied Finance Explorer and Artisan High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan High Income and Applied Finance 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 Applied Finance Explorer are associated (or correlated) with Artisan High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan High Income has no effect on the direction of Applied Finance i.e., Applied Finance and Artisan High go up and down completely randomly.
Pair Corralation between Applied Finance and Artisan High
Assuming the 90 days horizon Applied Finance Explorer is expected to generate 5.01 times more return on investment than Artisan High. However, Applied Finance is 5.01 times more volatile than Artisan High Income. It trades about 0.05 of its potential returns per unit of risk. Artisan High Income is currently generating about 0.15 per unit of risk. If you would invest 1,652 in Applied Finance Explorer on September 21, 2024 and sell it today you would earn a total of 563.00 from holding Applied Finance Explorer or generate 34.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Finance Explorer vs. Artisan High Income
Performance |
| Timeline |
| Applied Finance Explorer |
| Artisan High Income |
Applied Finance and Artisan High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Finance and Artisan High
The main advantage of trading using opposite Applied Finance and Artisan High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Finance position performs unexpectedly, Artisan High 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 Artisan High will offset losses from the drop in Artisan High's long position.| Applied Finance vs. Thrivent Small Cap | Applied Finance vs. Applied Finance Select | Applied Finance vs. Parnassus Endeavor Fund | Applied Finance vs. Queens Road Small |
| Artisan High vs. Small Cap Value Fund | Artisan High vs. Queens Road Small | Artisan High vs. Fidelity Small Cap | Artisan High vs. Applied Finance Explorer |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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