Correlation Between Artisan Select and Small Cap
Can any of the company-specific risk be diversified away by investing in both Artisan Select 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 Select 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 Select Equity and Small Cap Equity, you can compare the effects of market volatilities on Artisan Select 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 Select with a short position of Small Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Select and Small Cap.
Diversification Opportunities for Artisan Select and Small Cap
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Artisan and Small is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Select Equity and Small Cap Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Equity and Artisan Select 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 Select Equity 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 Equity has no effect on the direction of Artisan Select i.e., Artisan Select and Small Cap go up and down completely randomly.
Pair Corralation between Artisan Select and Small Cap
Assuming the 90 days horizon Artisan Select Equity is expected to generate 0.84 times more return on investment than Small Cap. However, Artisan Select Equity is 1.2 times less risky than Small Cap. It trades about 0.36 of its potential returns per unit of risk. Small Cap Equity is currently generating about 0.21 per unit of risk. If you would invest 1,560 in Artisan Select Equity on November 5, 2024 and sell it today you would earn a total of 83.00 from holding Artisan Select Equity or generate 5.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Artisan Select Equity vs. Small Cap Equity
Performance |
| Timeline |
| Artisan Select Equity |
| Small Cap Equity |
Artisan Select and Small Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artisan Select and Small Cap
The main advantage of trading using opposite Artisan Select and Small Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Select 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 Select vs. T Rowe Price | Artisan Select vs. Siit High Yield | Artisan Select vs. Dunham High Yield | Artisan Select vs. Six Circles Credit |
| Small Cap vs. Mid Cap 15x Strategy | Small Cap vs. Transamerica Emerging Markets | Small Cap vs. Western Assets Emerging | Small Cap vs. Growth Strategy Fund |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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