Correlation Between American Mutual and Artisan Value
Can any of the company-specific risk be diversified away by investing in both American Mutual and Artisan Value 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 American Mutual and Artisan Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Mutual Fund and Artisan Value Fund, you can compare the effects of market volatilities on American Mutual and Artisan Value 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 American Mutual with a short position of Artisan Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Artisan Value.
Diversification Opportunities for American Mutual and Artisan Value
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Artisan is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and Artisan Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Value and American Mutual 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 American Mutual Fund are associated (or correlated) with Artisan Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Value has no effect on the direction of American Mutual i.e., American Mutual and Artisan Value go up and down completely randomly.
Pair Corralation between American Mutual and Artisan Value
Assuming the 90 days horizon American Mutual is expected to generate 1.79 times less return on investment than Artisan Value. But when comparing it to its historical volatility, American Mutual Fund is 1.09 times less risky than Artisan Value. It trades about 0.15 of its potential returns per unit of risk. Artisan Value Fund is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,547 in Artisan Value Fund on August 30, 2024 and sell it today you would earn a total of 61.00 from holding Artisan Value Fund or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Mutual Fund vs. Artisan Value Fund
Performance |
| Timeline |
| American Mutual |
| Artisan Value |
American Mutual and Artisan Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Mutual and Artisan Value
The main advantage of trading using opposite American Mutual and Artisan Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual position performs unexpectedly, Artisan Value 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 Value will offset losses from the drop in Artisan Value's long position.| American Mutual vs. Janus Global Technology | American Mutual vs. Hennessy Technology Fund | American Mutual vs. Technology Ultrasector Profund | American Mutual vs. Dreyfus Technology Growth |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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