Correlation Between Artisan Thematic and Federated Kaufmann
Can any of the company-specific risk be diversified away by investing in both Artisan Thematic and Federated Kaufmann 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 Federated Kaufmann 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 Federated Kaufmann Fund, you can compare the effects of market volatilities on Artisan Thematic and Federated Kaufmann 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 Federated Kaufmann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Thematic and Federated Kaufmann.
Diversification Opportunities for Artisan Thematic and Federated Kaufmann
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Artisan and Federated is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Thematic Fund and Federated Kaufmann Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Kaufmann 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 Federated Kaufmann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Kaufmann has no effect on the direction of Artisan Thematic i.e., Artisan Thematic and Federated Kaufmann go up and down completely randomly.
Pair Corralation between Artisan Thematic and Federated Kaufmann
Assuming the 90 days horizon Artisan Thematic Fund is expected to generate 0.95 times more return on investment than Federated Kaufmann. However, Artisan Thematic Fund is 1.05 times less risky than Federated Kaufmann. It trades about 0.42 of its potential returns per unit of risk. Federated Kaufmann Fund is currently generating about 0.32 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 | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Artisan Thematic Fund vs. Federated Kaufmann Fund
Performance |
| Timeline |
| Artisan Thematic |
| Federated Kaufmann |
Artisan Thematic and Federated Kaufmann Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artisan Thematic and Federated Kaufmann
The main advantage of trading using opposite Artisan Thematic and Federated Kaufmann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Thematic position performs unexpectedly, Federated Kaufmann 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 Federated Kaufmann will offset losses from the drop in Federated Kaufmann's long position.The idea behind Artisan Thematic Fund and Federated Kaufmann Fund 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.
| Federated Kaufmann vs. T Rowe Price | Federated Kaufmann vs. Artisan Thematic Fund | Federated Kaufmann vs. Issachar Fund Class | Federated Kaufmann vs. T Rowe Price |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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