Correlation Between Artisan Small and Regional Bank
Can any of the company-specific risk be diversified away by investing in both Artisan Small and Regional Bank 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 Regional Bank 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 Regional Bank Fund, you can compare the effects of market volatilities on Artisan Small and Regional Bank 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 Regional Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Small and Regional Bank.
Diversification Opportunities for Artisan Small and Regional Bank
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Artisan and Regional is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Small Cap and Regional Bank Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regional Bank 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 Regional Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regional Bank has no effect on the direction of Artisan Small i.e., Artisan Small and Regional Bank go up and down completely randomly.
Pair Corralation between Artisan Small and Regional Bank
Assuming the 90 days horizon Artisan Small is expected to generate 2.16 times less return on investment than Regional Bank. But when comparing it to its historical volatility, Artisan Small Cap is 1.4 times less risky than Regional Bank. It trades about 0.11 of its potential returns per unit of risk. Regional Bank Fund is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 2,351 in Regional Bank Fund on September 3, 2024 and sell it today you would earn a total of 1,016 from holding Regional Bank Fund or generate 43.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Artisan Small Cap vs. Regional Bank Fund
Performance |
| Timeline |
| Artisan Small Cap |
| Regional Bank |
Artisan Small and Regional Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artisan Small and Regional Bank
The main advantage of trading using opposite Artisan Small and Regional Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Small position performs unexpectedly, Regional Bank 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 Regional Bank will offset losses from the drop in Regional Bank'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 |
| Regional Bank vs. Allianzgi Technology Fund | Regional Bank vs. Pgim Jennison Technology | Regional Bank vs. Blackrock Science Technology | Regional Bank vs. Biotechnology Ultrasector Profund |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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