Correlation Between Artisan Thematic and Small Cap
Can any of the company-specific risk be diversified away by investing in both Artisan Thematic and Small Cap 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 Small Cap 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 Small Cap Value, you can compare the effects of market volatilities on Artisan Thematic and Small Cap 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 Small Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Thematic and Small Cap.
Diversification Opportunities for Artisan Thematic and Small Cap
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Artisan and Small is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Thematic Fund and Small Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Value 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 Small Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Value has no effect on the direction of Artisan Thematic i.e., Artisan Thematic and Small Cap go up and down completely randomly.
Pair Corralation between Artisan Thematic and Small Cap
Assuming the 90 days horizon Artisan Thematic is expected to generate 1.03 times less return on investment than Small Cap. But when comparing it to its historical volatility, Artisan Thematic Fund is 1.82 times less risky than Small Cap. It trades about 0.42 of its potential returns per unit of risk. Small Cap Value is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,809 in Small Cap Value on September 3, 2024 and sell it today you would earn a total of 150.00 from holding Small Cap Value or generate 8.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Artisan Thematic Fund vs. Small Cap Value
Performance |
| Timeline |
| Artisan Thematic |
| Small Cap Value |
Artisan Thematic and Small Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artisan Thematic and Small Cap
The main advantage of trading using opposite Artisan Thematic and Small Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Thematic position performs unexpectedly, Small Cap 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 Small Cap will offset losses from the drop in Small Cap's long position.| Artisan Thematic vs. Gmo High Yield | Artisan Thematic vs. Maryland Tax Free Bond | Artisan Thematic vs. T Rowe Price | Artisan Thematic vs. California Bond Fund |
| Small Cap vs. Fidelity Advisor Gold | Small Cap vs. Global Gold Fund | Small Cap vs. Goldman Sachs Clean | Small Cap vs. Sprott Gold Equity |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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