Correlation Between Artisan Partners and TPG
Can any of the company-specific risk be diversified away by investing in both Artisan Partners and TPG 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 TPG 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 TPG Inc, you can compare the effects of market volatilities on Artisan Partners and TPG 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 TPG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Partners and TPG.
Diversification Opportunities for Artisan Partners and TPG
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Artisan and TPG is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Partners Asset and TPG Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPG Inc 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 TPG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPG Inc has no effect on the direction of Artisan Partners i.e., Artisan Partners and TPG go up and down completely randomly.
Pair Corralation between Artisan Partners and TPG
Given the investment horizon of 90 days Artisan Partners Asset is expected to generate 0.72 times more return on investment than TPG. However, Artisan Partners Asset is 1.38 times less risky than TPG. It trades about 0.18 of its potential returns per unit of risk. TPG Inc is currently generating about 0.07 per unit of risk. If you would invest 4,372 in Artisan Partners Asset on August 27, 2024 and sell it today you would earn a total of 398.00 from holding Artisan Partners Asset or generate 9.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Artisan Partners Asset vs. TPG Inc
Performance |
| Timeline |
| Artisan Partners Asset |
| TPG Inc |
Artisan Partners and TPG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artisan Partners and TPG
The main advantage of trading using opposite Artisan Partners and TPG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Partners position performs unexpectedly, TPG 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 TPG will offset losses from the drop in TPG'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 |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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