Correlation Between Artisan Select and American Funds
Can any of the company-specific risk be diversified away by investing in both Artisan Select and American Funds 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 Select and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Artisan Select Equity and American Funds 2055, you can compare the effects of market volatilities on Artisan Select and American Funds 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 Select with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Select and American Funds.
Diversification Opportunities for Artisan Select and American Funds
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Artisan and American is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Select Equity and American Funds 2055 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds 2055 and Artisan Select 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 Select Equity are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds 2055 has no effect on the direction of Artisan Select i.e., Artisan Select and American Funds go up and down completely randomly.
Pair Corralation between Artisan Select and American Funds
Assuming the 90 days horizon Artisan Select Equity is expected to generate 1.08 times more return on investment than American Funds. However, Artisan Select is 1.08 times more volatile than American Funds 2055. It trades about 0.11 of its potential returns per unit of risk. American Funds 2055 is currently generating about 0.11 per unit of risk. If you would invest 1,064 in Artisan Select Equity on September 13, 2024 and sell it today you would earn a total of 550.00 from holding Artisan Select Equity or generate 51.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Artisan Select Equity vs. American Funds 2055
Performance |
| Timeline |
| Artisan Select Equity |
| American Funds 2055 |
Artisan Select and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artisan Select and American Funds
The main advantage of trading using opposite Artisan Select and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Select position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.| Artisan Select vs. Qs International Equity | Artisan Select vs. Ab Fixed Income Shares | Artisan Select vs. Gmo Global Equity | Artisan Select vs. Cutler Equity |
| American Funds vs. Nuveen Real Estate | American Funds vs. Commonwealth Real Estate | American Funds vs. Redwood Real Estate | American Funds vs. Guggenheim Risk Managed |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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