Correlation Between Artisan Emerging and Western Asset
Can any of the company-specific risk be diversified away by investing in both Artisan Emerging and Western Asset 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 Western Asset 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 Western Asset New, you can compare the effects of market volatilities on Artisan Emerging and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Emerging and Western Asset.
Diversification Opportunities for Artisan Emerging and Western Asset
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Artisan and Western is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Emerging Markets and Western Asset New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset New 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset New has no effect on the direction of Artisan Emerging i.e., Artisan Emerging and Western Asset go up and down completely randomly.
Pair Corralation between Artisan Emerging and Western Asset
Assuming the 90 days horizon Artisan Emerging Markets is expected to under-perform the Western Asset. But the mutual fund apears to be less risky and, when comparing its historical volatility, Artisan Emerging Markets is 1.26 times less risky than Western Asset. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Western Asset New is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,196 in Western Asset New on September 5, 2024 and sell it today you would earn a total of 17.00 from holding Western Asset New or generate 1.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Artisan Emerging Markets vs. Western Asset New
Performance |
| Timeline |
| Artisan Emerging Markets |
| Western Asset New |
Artisan Emerging and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artisan Emerging and Western Asset
The main advantage of trading using opposite Artisan Emerging and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Emerging position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Artisan Emerging vs. Artisan Value Income | Artisan Emerging vs. Artisan Thematic Fund | Artisan Emerging vs. Artisan Small Cap | Artisan Emerging vs. Artisan Floating Rate |
| Western Asset vs. Locorr Market Trend | Western Asset vs. Templeton Developing Markets | Western Asset vs. Massmutual Select Diversified | Western Asset vs. Artisan 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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