Correlation Between American Funds and Artisan Emerging
Can any of the company-specific risk be diversified away by investing in both American Funds and Artisan Emerging 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 Funds and Artisan Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Fundamental and Artisan Emerging Markets, you can compare the effects of market volatilities on American Funds and Artisan Emerging 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 Funds with a short position of Artisan Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Artisan Emerging.
Diversification Opportunities for American Funds and Artisan Emerging
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Artisan is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Fundamental and Artisan Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Emerging Markets and American Funds 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 Funds Fundamental are associated (or correlated) with Artisan Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Emerging Markets has no effect on the direction of American Funds i.e., American Funds and Artisan Emerging go up and down completely randomly.
Pair Corralation between American Funds and Artisan Emerging
Assuming the 90 days horizon American Funds Fundamental is expected to generate 4.38 times more return on investment than Artisan Emerging. However, American Funds is 4.38 times more volatile than Artisan Emerging Markets. It trades about 0.1 of its potential returns per unit of risk. Artisan Emerging Markets is currently generating about 0.14 per unit of risk. If you would invest 7,976 in American Funds Fundamental on September 3, 2024 and sell it today you would earn a total of 900.00 from holding American Funds Fundamental or generate 11.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds Fundamental vs. Artisan Emerging Markets
Performance |
| Timeline |
| American Funds Funda |
| Artisan Emerging Markets |
American Funds and Artisan Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Artisan Emerging
The main advantage of trading using opposite American Funds and Artisan Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Artisan Emerging 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 Emerging will offset losses from the drop in Artisan Emerging's long position.| American Funds vs. Vanguard Total Stock | American Funds vs. Vanguard 500 Index | American Funds vs. Vanguard Total Stock | American Funds vs. Vanguard Total Stock |
| Artisan Emerging vs. Morgan Stanley Emerging | Artisan Emerging vs. Kinetics Market Opportunities | Artisan Emerging vs. Massmutual Select Diversified | Artisan Emerging vs. Barings Emerging Markets |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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