Correlation Between Artisan Small and Small Cap
Can any of the company-specific risk be diversified away by investing in both Artisan Small 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 Small 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 Small Cap and Small Cap Special, you can compare the effects of market volatilities on Artisan Small 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 Small with a short position of Small Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Small and Small Cap.
Diversification Opportunities for Artisan Small and Small Cap
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Artisan and Small is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Small Cap and Small Cap Special in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Special 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 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 Special has no effect on the direction of Artisan Small i.e., Artisan Small and Small Cap go up and down completely randomly.
Pair Corralation between Artisan Small and Small Cap
Assuming the 90 days horizon Artisan Small Cap is expected to generate 1.79 times more return on investment than Small Cap. However, Artisan Small is 1.79 times more volatile than Small Cap Special. It trades about 0.0 of its potential returns per unit of risk. Small Cap Special is currently generating about -0.13 per unit of risk. If you would invest 3,918 in Artisan Small Cap on September 12, 2024 and sell it today you would lose (3.00) from holding Artisan Small Cap or give up 0.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Artisan Small Cap vs. Small Cap Special
Performance |
| Timeline |
| Artisan Small Cap |
| Small Cap Special |
Artisan Small and Small Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artisan Small and Small Cap
The main advantage of trading using opposite Artisan Small and Small Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Small 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 Small vs. Third Avenue Real | Artisan Small vs. Aegis Value Fund | Artisan Small vs. Litman Gregory Masters | Artisan Small vs. Marsico Growth Fund |
| Small Cap vs. Artisan Small Cap | Small Cap vs. Smallcap Growth Fund | Small Cap vs. Needham Aggressive Growth | Small Cap vs. Ftfa Franklin Templeton Growth |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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