Correlation Between Artisan Emerging and Dreyfus High

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Can any of the company-specific risk be diversified away by investing in both Artisan Emerging and Dreyfus High 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 Emerging and Dreyfus High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Artisan Emerging Markets and Dreyfus High Yield, you can compare the effects of market volatilities on Artisan Emerging and Dreyfus High 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 Emerging with a short position of Dreyfus High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Emerging and Dreyfus High.

Diversification Opportunities for Artisan Emerging and Dreyfus High

0.84
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Artisan and Dreyfus is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Emerging Markets and Dreyfus High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus High Yield and Artisan Emerging 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 Emerging Markets are associated (or correlated) with Dreyfus High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus High Yield has no effect on the direction of Artisan Emerging i.e., Artisan Emerging and Dreyfus High go up and down completely randomly.

Pair Corralation between Artisan Emerging and Dreyfus High

Assuming the 90 days horizon Artisan Emerging Markets is expected to generate 0.79 times more return on investment than Dreyfus High. However, Artisan Emerging Markets is 1.26 times less risky than Dreyfus High. It trades about 0.16 of its potential returns per unit of risk. Dreyfus High Yield is currently generating about 0.12 per unit of risk. If you would invest  851.00  in Artisan Emerging Markets on August 30, 2024 and sell it today you would earn a total of  180.00  from holding Artisan Emerging Markets or generate 21.15% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Artisan Emerging Markets  vs.  Dreyfus High Yield

 Performance 
       Timeline  
Artisan Emerging Markets 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Emerging Markets are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Artisan Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Dreyfus High Yield 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Dreyfus High Yield are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Dreyfus High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Artisan Emerging and Dreyfus High Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Artisan Emerging and Dreyfus High

The main advantage of trading using opposite Artisan Emerging and Dreyfus High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Emerging position performs unexpectedly, Dreyfus High 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 Dreyfus High will offset losses from the drop in Dreyfus High's long position.
The idea behind Artisan Emerging Markets and Dreyfus High Yield pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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