Correlation Between Artisan Small and Kinetics Small
Can any of the company-specific risk be diversified away by investing in both Artisan Small and Kinetics Small 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 Kinetics Small 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 Kinetics Small Cap, you can compare the effects of market volatilities on Artisan Small and Kinetics Small 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 Kinetics Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Small and Kinetics Small.
Diversification Opportunities for Artisan Small and Kinetics Small
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Artisan and Kinetics is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Small Cap and Kinetics Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Small Cap 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 Kinetics Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetics Small Cap has no effect on the direction of Artisan Small i.e., Artisan Small and Kinetics Small go up and down completely randomly.
Pair Corralation between Artisan Small and Kinetics Small
Assuming the 90 days horizon Artisan Small Cap is expected to under-perform the Kinetics Small. But the mutual fund apears to be less risky and, when comparing its historical volatility, Artisan Small Cap is 1.75 times less risky than Kinetics Small. The mutual fund trades about -0.16 of its potential returns per unit of risk. The Kinetics Small Cap is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 19,165 in Kinetics Small Cap on October 12, 2024 and sell it today you would lose (227.00) from holding Kinetics Small Cap or give up 1.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Artisan Small Cap vs. Kinetics Small Cap
Performance |
| Timeline |
| Artisan Small Cap |
| Kinetics Small Cap |
Artisan Small and Kinetics Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artisan Small and Kinetics Small
The main advantage of trading using opposite Artisan Small and Kinetics Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Small position performs unexpectedly, Kinetics Small 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 Kinetics Small will offset losses from the drop in Kinetics Small's long position.| Artisan Small vs. Artisan Global Opportunities | Artisan Small vs. Artisan Mid Cap | Artisan Small vs. Wasatch Ultra Growth | Artisan Small vs. Artisan International Value |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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