Correlation Between Artisan International and Pear Tree
Can any of the company-specific risk be diversified away by investing in both Artisan International and Pear Tree 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 International and Pear Tree into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Artisan International Fund and Pear Tree Polaris, you can compare the effects of market volatilities on Artisan International and Pear Tree 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 International with a short position of Pear Tree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan International and Pear Tree.
Diversification Opportunities for Artisan International and Pear Tree
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Artisan and Pear is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Artisan International Fund and Pear Tree Polaris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pear Tree Polaris and Artisan International 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 International Fund are associated (or correlated) with Pear Tree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pear Tree Polaris has no effect on the direction of Artisan International i.e., Artisan International and Pear Tree go up and down completely randomly.
Pair Corralation between Artisan International and Pear Tree
Assuming the 90 days horizon Artisan International Fund is expected to generate 0.9 times more return on investment than Pear Tree. However, Artisan International Fund is 1.11 times less risky than Pear Tree. It trades about -0.1 of its potential returns per unit of risk. Pear Tree Polaris is currently generating about -0.16 per unit of risk. If you would invest 3,062 in Artisan International Fund on August 29, 2024 and sell it today you would lose (51.00) from holding Artisan International Fund or give up 1.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Artisan International Fund vs. Pear Tree Polaris
Performance |
| Timeline |
| Artisan International |
| Pear Tree Polaris |
Artisan International and Pear Tree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artisan International and Pear Tree
The main advantage of trading using opposite Artisan International and Pear Tree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan International position performs unexpectedly, Pear Tree 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 Pear Tree will offset losses from the drop in Pear Tree's long position.| Artisan International vs. Artisan Mid Cap | Artisan International vs. Oakmark International Fund | Artisan International vs. Selected American Shares | Artisan International vs. Dodge International Stock |
| Pear Tree vs. HUMANA INC | Pear Tree vs. Aquagold International | Pear Tree vs. Barloworld Ltd ADR | Pear Tree vs. Morningstar Unconstrained Allocation |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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