Correlation Between Artisan Thematic and New Perspective
Can any of the company-specific risk be diversified away by investing in both Artisan Thematic and New Perspective 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 New Perspective 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 New Perspective Fund, you can compare the effects of market volatilities on Artisan Thematic and New Perspective 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 New Perspective. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Thematic and New Perspective.
Diversification Opportunities for Artisan Thematic and New Perspective
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Artisan and New is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Thematic Fund and New Perspective Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Perspective 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 New Perspective. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Perspective has no effect on the direction of Artisan Thematic i.e., Artisan Thematic and New Perspective go up and down completely randomly.
Pair Corralation between Artisan Thematic and New Perspective
Assuming the 90 days horizon Artisan Thematic Fund is expected to generate 1.65 times more return on investment than New Perspective. However, Artisan Thematic is 1.65 times more volatile than New Perspective Fund. It trades about 0.04 of its potential returns per unit of risk. New Perspective Fund is currently generating about 0.05 per unit of risk. If you would invest 2,497 in Artisan Thematic Fund on September 12, 2024 and sell it today you would earn a total of 20.00 from holding Artisan Thematic Fund or generate 0.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Artisan Thematic Fund vs. New Perspective Fund
Performance |
| Timeline |
| Artisan Thematic |
| New Perspective |
Artisan Thematic and New Perspective Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artisan Thematic and New Perspective
The main advantage of trading using opposite Artisan Thematic and New Perspective positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Thematic position performs unexpectedly, New Perspective 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 New Perspective will offset losses from the drop in New Perspective's long position.| Artisan Thematic vs. Huber Capital Diversified | Artisan Thematic vs. Western Asset Diversified | Artisan Thematic vs. Jhancock Diversified Macro | Artisan Thematic vs. T Rowe Price |
| New Perspective vs. Gamco Global Gold | New Perspective vs. Sprott Gold Equity | New Perspective vs. International Investors Gold | New Perspective vs. Vy Goldman Sachs |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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