Correlation Between Artisan Small and Franklin Arizona
Can any of the company-specific risk be diversified away by investing in both Artisan Small and Franklin Arizona 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 Small and Franklin Arizona into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Artisan Small Cap and Franklin Arizona Tax Free, you can compare the effects of market volatilities on Artisan Small and Franklin Arizona 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 Small with a short position of Franklin Arizona. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Small and Franklin Arizona.
Diversification Opportunities for Artisan Small and Franklin Arizona
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Artisan and FRANKLIN is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Small Cap and Franklin Arizona Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Arizona Tax and Artisan Small 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 Small Cap are associated (or correlated) with Franklin Arizona. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Arizona Tax has no effect on the direction of Artisan Small i.e., Artisan Small and Franklin Arizona go up and down completely randomly.
Pair Corralation between Artisan Small and Franklin Arizona
Assuming the 90 days horizon Artisan Small Cap is expected to generate 6.06 times more return on investment than Franklin Arizona. However, Artisan Small is 6.06 times more volatile than Franklin Arizona Tax Free. It trades about 0.11 of its potential returns per unit of risk. Franklin Arizona Tax Free is currently generating about 0.13 per unit of risk. If you would invest 3,393 in Artisan Small Cap on September 3, 2024 and sell it today you would earn a total of 609.00 from holding Artisan Small Cap or generate 17.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Artisan Small Cap vs. Franklin Arizona Tax Free
Performance |
| Timeline |
| Artisan Small Cap |
| Franklin Arizona Tax |
Artisan Small and Franklin Arizona Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artisan Small and Franklin Arizona
The main advantage of trading using opposite Artisan Small and Franklin Arizona positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Small position performs unexpectedly, Franklin Arizona 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 Franklin Arizona will offset losses from the drop in Franklin Arizona's long position.| Artisan Small vs. Vanguard Windsor Fund | Artisan Small vs. Americafirst Large Cap | Artisan Small vs. Transamerica Large Cap | Artisan Small vs. Dana Large Cap |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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