Correlation Between Artisan Small and Steward Large
Can any of the company-specific risk be diversified away by investing in both Artisan Small and Steward Large 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 Steward Large 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 Steward Large Cap, you can compare the effects of market volatilities on Artisan Small and Steward Large 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 Steward Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Small and Steward Large.
Diversification Opportunities for Artisan Small and Steward Large
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Artisan and Steward is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Small Cap and Steward Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steward Large Cap 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 Steward Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steward Large Cap has no effect on the direction of Artisan Small i.e., Artisan Small and Steward Large go up and down completely randomly.
Pair Corralation between Artisan Small and Steward Large
Assuming the 90 days horizon Artisan Small Cap is expected to under-perform the Steward Large. In addition to that, Artisan Small is 1.64 times more volatile than Steward Large Cap. It trades about -0.16 of its total potential returns per unit of risk. Steward Large Cap is currently generating about -0.04 per unit of volatility. If you would invest 2,753 in Steward Large Cap on November 27, 2024 and sell it today you would lose (17.00) from holding Steward Large Cap or give up 0.62% 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. Steward Large Cap
Performance |
| Timeline |
| Artisan Small Cap |
| Steward Large Cap |
Artisan Small and Steward Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artisan Small and Steward Large
The main advantage of trading using opposite Artisan Small and Steward Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Small position performs unexpectedly, Steward Large 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 Steward Large will offset losses from the drop in Steward Large's long position.| Artisan Small vs. Pace High Yield | Artisan Small vs. Aqr Risk Parity | Artisan Small vs. Transamerica High Yield | Artisan Small vs. Goldman Sachs High |
| Steward Large vs. Artisan Select Equity | Steward Large vs. Bbh Partner Fund | Steward Large vs. Qs International Equity | Steward Large vs. Nationwide E Plus |
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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