Correlation Between Artisan Small and American Funds
Can any of the company-specific risk be diversified away by investing in both Artisan Small 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 Small 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 Small Cap and American Funds Growth, you can compare the effects of market volatilities on Artisan Small 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 Small with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Small and American Funds.
Diversification Opportunities for Artisan Small and American Funds
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Artisan and American is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Small Cap and American Funds Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Growth 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 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 Growth has no effect on the direction of Artisan Small i.e., Artisan Small and American Funds go up and down completely randomly.
Pair Corralation between Artisan Small and American Funds
Assuming the 90 days horizon Artisan Small is expected to generate 2.12 times less return on investment than American Funds. In addition to that, Artisan Small is 1.49 times more volatile than American Funds Growth. It trades about 0.03 of its total potential returns per unit of risk. American Funds Growth is currently generating about 0.08 per unit of volatility. If you would invest 1,830 in American Funds Growth on November 28, 2024 and sell it today you would earn a total of 746.00 from holding American Funds Growth or generate 40.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Artisan Small Cap vs. American Funds Growth
Performance |
| Timeline |
| Artisan Small Cap |
| American Funds Growth |
Artisan Small and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artisan Small and American Funds
The main advantage of trading using opposite Artisan Small and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Small 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 Small vs. Virtus High Yield | Artisan Small vs. Aqr Alternative Risk | Artisan Small vs. Pioneer High Income | Artisan Small vs. Prudential High Yield |
| American Funds vs. Ep Emerging Markets | American Funds vs. Touchstone Small Cap | American Funds vs. Transamerica International Small | American Funds vs. Astoncrosswind Small Cap |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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