Correlation Between Artisan Partners and Encore Capital
Can any of the company-specific risk be diversified away by investing in both Artisan Partners and Encore Capital 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 Artisan Partners and Encore Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Artisan Partners Asset and Encore Capital Group, you can compare the effects of market volatilities on Artisan Partners and Encore Capital 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 Artisan Partners with a short position of Encore Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Partners and Encore Capital.
Diversification Opportunities for Artisan Partners and Encore Capital
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Artisan and Encore is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Partners Asset and Encore Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Encore Capital Group and Artisan Partners 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 Artisan Partners Asset are associated (or correlated) with Encore Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Encore Capital Group has no effect on the direction of Artisan Partners i.e., Artisan Partners and Encore Capital go up and down completely randomly.
Pair Corralation between Artisan Partners and Encore Capital
Given the investment horizon of 90 days Artisan Partners Asset is expected to generate 0.8 times more return on investment than Encore Capital. However, Artisan Partners Asset is 1.26 times less risky than Encore Capital. It trades about 0.07 of its potential returns per unit of risk. Encore Capital Group is currently generating about 0.02 per unit of risk. If you would invest 3,477 in Artisan Partners Asset on August 29, 2024 and sell it today you would earn a total of 1,386 from holding Artisan Partners Asset or generate 39.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Artisan Partners Asset vs. Encore Capital Group
Performance |
| Timeline |
| Artisan Partners Asset |
| Encore Capital Group |
Artisan Partners and Encore Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artisan Partners and Encore Capital
The main advantage of trading using opposite Artisan Partners and Encore Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Partners position performs unexpectedly, Encore Capital 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 Encore Capital will offset losses from the drop in Encore Capital's long position.| Artisan Partners vs. Federated Premier Municipal | Artisan Partners vs. Blackrock Muniyield | Artisan Partners vs. Diamond Hill Investment | Artisan Partners vs. NXG NextGen Infrastructure |
| Encore Capital vs. Guild Holdings Co | Encore Capital vs. Mr Cooper Group | Encore Capital vs. CNFinance Holdings | Encore Capital vs. Security National Financial |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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