Correlation Between Artisan Small and Sp 500
Can any of the company-specific risk be diversified away by investing in both Artisan Small and Sp 500 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 Sp 500 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 Sp 500 Equal, you can compare the effects of market volatilities on Artisan Small and Sp 500 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 Sp 500. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Small and Sp 500.
Diversification Opportunities for Artisan Small and Sp 500
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Artisan and INDEX is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Small Cap and Sp 500 Equal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sp 500 Equal 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 Sp 500. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sp 500 Equal has no effect on the direction of Artisan Small i.e., Artisan Small and Sp 500 go up and down completely randomly.
Pair Corralation between Artisan Small and Sp 500
Assuming the 90 days horizon Artisan Small Cap is expected to under-perform the Sp 500. In addition to that, Artisan Small is 1.67 times more volatile than Sp 500 Equal. It trades about -0.21 of its total potential returns per unit of risk. Sp 500 Equal is currently generating about -0.15 per unit of volatility. If you would invest 5,787 in Sp 500 Equal on October 9, 2024 and sell it today you would lose (176.00) from holding Sp 500 Equal or give up 3.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Artisan Small Cap vs. Sp 500 Equal
Performance |
| Timeline |
| Artisan Small Cap |
| Sp 500 Equal |
Artisan Small and Sp 500 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artisan Small and Sp 500
The main advantage of trading using opposite Artisan Small and Sp 500 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Small position performs unexpectedly, Sp 500 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 Sp 500 will offset losses from the drop in Sp 500's long position.| Artisan Small vs. Us Vector Equity | Artisan Small vs. Smallcap World Fund | Artisan Small vs. Franklin Equity Income | Artisan Small vs. Siit Equity Factor |
| Sp 500 vs. Icon Financial Fund | Sp 500 vs. Financials Ultrasector Profund | Sp 500 vs. Blackstone Secured Lending | Sp 500 vs. Vanguard Financials Index |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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