Correlation Between Artisan Small and State Street
Can any of the company-specific risk be diversified away by investing in both Artisan Small and State Street 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 State Street 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 State Street Target, you can compare the effects of market volatilities on Artisan Small and State Street 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 State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Small and State Street.
Diversification Opportunities for Artisan Small and State Street
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Artisan and State is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Small Cap and State Street Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Target 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Target has no effect on the direction of Artisan Small i.e., Artisan Small and State Street go up and down completely randomly.
Pair Corralation between Artisan Small and State Street
Assuming the 90 days horizon Artisan Small Cap is expected to generate 1.87 times more return on investment than State Street. However, Artisan Small is 1.87 times more volatile than State Street Target. It trades about 0.07 of its potential returns per unit of risk. State Street Target is currently generating about 0.1 per unit of risk. If you would invest 3,450 in Artisan Small Cap on September 1, 2024 and sell it today you would earn a total of 552.00 from holding Artisan Small Cap or generate 16.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.47% |
| Values | Daily Returns |
Artisan Small Cap vs. State Street Target
Performance |
| Timeline |
| Artisan Small Cap |
| State Street Target |
Artisan Small and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artisan Small and State Street
The main advantage of trading using opposite Artisan Small and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Small position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street's long position.| Artisan Small vs. Artisan Thematic Fund | Artisan Small vs. Artisan Floating Rate | Artisan Small vs. Artisan Global Unconstrained | Artisan Small vs. Artisan Emerging Markets |
| State Street vs. Ab All Market | State Street vs. Vanguard Developed Markets | State Street vs. Rbc Emerging Markets | State Street vs. Harbor Diversified International |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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