Correlation Between Artisan Small and Kensington Dynamic
Can any of the company-specific risk be diversified away by investing in both Artisan Small and Kensington Dynamic 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 Kensington Dynamic 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 Kensington Dynamic Growth, you can compare the effects of market volatilities on Artisan Small and Kensington Dynamic 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 Kensington Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Small and Kensington Dynamic.
Diversification Opportunities for Artisan Small and Kensington Dynamic
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Artisan and Kensington is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Small Cap and Kensington Dynamic Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kensington Dynamic Growth 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 Kensington Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kensington Dynamic Growth has no effect on the direction of Artisan Small i.e., Artisan Small and Kensington Dynamic go up and down completely randomly.
Pair Corralation between Artisan Small and Kensington Dynamic
Assuming the 90 days horizon Artisan Small Cap is expected to generate 1.79 times more return on investment than Kensington Dynamic. However, Artisan Small is 1.79 times more volatile than Kensington Dynamic Growth. It trades about 0.05 of its potential returns per unit of risk. Kensington Dynamic Growth is currently generating about 0.04 per unit of risk. If you would invest 3,137 in Artisan Small Cap on September 12, 2024 and sell it today you would earn a total of 778.00 from holding Artisan Small Cap or generate 24.8% 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. Kensington Dynamic Growth
Performance |
| Timeline |
| Artisan Small Cap |
| Kensington Dynamic Growth |
Artisan Small and Kensington Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artisan Small and Kensington Dynamic
The main advantage of trading using opposite Artisan Small and Kensington Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Small position performs unexpectedly, Kensington Dynamic 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 Kensington Dynamic will offset losses from the drop in Kensington Dynamic's long position.| Artisan Small vs. Third Avenue Real | Artisan Small vs. Aegis Value Fund | Artisan Small vs. Litman Gregory Masters | Artisan Small vs. Marsico Growth Fund |
| Kensington Dynamic vs. Needham Aggressive Growth | Kensington Dynamic vs. Qs Defensive Growth | Kensington Dynamic vs. T Rowe Price | Kensington Dynamic vs. Champlain Mid Cap |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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