Correlation Between Artisan Small and Artisan Thematic
Can any of the company-specific risk be diversified away by investing in both Artisan Small and Artisan Thematic 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 Small and Artisan Thematic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Artisan Small Cap and Artisan Thematic, you can compare the effects of market volatilities on Artisan Small and Artisan Thematic 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 Small with a short position of Artisan Thematic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Small and Artisan Thematic.
Diversification Opportunities for Artisan Small and Artisan Thematic
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Artisan and Artisan is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Small Cap and Artisan Thematic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Thematic and Artisan Small 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 Small Cap are associated (or correlated) with Artisan Thematic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Thematic has no effect on the direction of Artisan Small i.e., Artisan Small and Artisan Thematic go up and down completely randomly.
Pair Corralation between Artisan Small and Artisan Thematic
Assuming the 90 days horizon Artisan Small Cap is expected to generate 1.38 times more return on investment than Artisan Thematic. However, Artisan Small is 1.38 times more volatile than Artisan Thematic. It trades about 0.16 of its potential returns per unit of risk. Artisan Thematic is currently generating about 0.16 per unit of risk. If you would invest 3,698 in Artisan Small Cap on August 28, 2024 and sell it today you would earn a total of 188.00 from holding Artisan Small Cap or generate 5.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Artisan Small Cap vs. Artisan Thematic
Performance |
| Timeline |
| Artisan Small Cap |
| Artisan Thematic |
Artisan Small and Artisan Thematic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artisan Small and Artisan Thematic
The main advantage of trading using opposite Artisan Small and Artisan Thematic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Small position performs unexpectedly, Artisan Thematic 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 Artisan Thematic will offset losses from the drop in Artisan Thematic's long position.| Artisan Small vs. Artisan Value Income | Artisan Small vs. Artisan Developing World | Artisan Small vs. Artisan Thematic Fund | Artisan Small vs. Artisan Floating Rate |
| Artisan Thematic vs. Artisan High Income | Artisan Thematic vs. Artisan Developing World | Artisan Thematic vs. Artisan Global Opportunities | Artisan Thematic vs. Rondure New World |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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