Correlation Between Artisan Thematic and Aristotle Value
Can any of the company-specific risk be diversified away by investing in both Artisan Thematic and Aristotle Value 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 Thematic and Aristotle Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Artisan Thematic Fund and Aristotle Value Equity, you can compare the effects of market volatilities on Artisan Thematic and Aristotle Value 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 Thematic with a short position of Aristotle Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Thematic and Aristotle Value.
Diversification Opportunities for Artisan Thematic and Aristotle Value
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Artisan and Aristotle is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Thematic Fund and Aristotle Value Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aristotle Value Equity and Artisan Thematic 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 Thematic Fund are associated (or correlated) with Aristotle Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aristotle Value Equity has no effect on the direction of Artisan Thematic i.e., Artisan Thematic and Aristotle Value go up and down completely randomly.
Pair Corralation between Artisan Thematic and Aristotle Value
Assuming the 90 days horizon Artisan Thematic Fund is expected to generate 1.19 times more return on investment than Aristotle Value. However, Artisan Thematic is 1.19 times more volatile than Aristotle Value Equity. It trades about 0.42 of its potential returns per unit of risk. Aristotle Value Equity is currently generating about 0.26 per unit of risk. If you would invest 2,330 in Artisan Thematic Fund on September 4, 2024 and sell it today you would earn a total of 193.00 from holding Artisan Thematic Fund or generate 8.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Artisan Thematic Fund vs. Aristotle Value Equity
Performance |
| Timeline |
| Artisan Thematic |
| Aristotle Value Equity |
Artisan Thematic and Aristotle Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artisan Thematic and Aristotle Value
The main advantage of trading using opposite Artisan Thematic and Aristotle Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Thematic position performs unexpectedly, Aristotle Value 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 Aristotle Value will offset losses from the drop in Aristotle Value's long position.The idea behind Artisan Thematic Fund and Aristotle Value Equity pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Aristotle Value vs. Aristotle Funds Series | Aristotle Value vs. Aristotle International Eq | Aristotle Value vs. Aristotle Funds Series | Aristotle Value vs. Aristotle Funds Series |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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