Correlation Between GM and Artisan Mid
Can any of the company-specific risk be diversified away by investing in both GM and Artisan Mid 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 GM and Artisan Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Artisan Mid Cap, you can compare the effects of market volatilities on GM and Artisan Mid 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 GM with a short position of Artisan Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Artisan Mid.
Diversification Opportunities for GM and Artisan Mid
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GM and Artisan is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Artisan Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Mid Cap and GM 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 General Motors are associated (or correlated) with Artisan Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Mid Cap has no effect on the direction of GM i.e., GM and Artisan Mid go up and down completely randomly.
Pair Corralation between GM and Artisan Mid
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Artisan Mid. In addition to that, GM is 3.86 times more volatile than Artisan Mid Cap. It trades about -0.11 of its total potential returns per unit of risk. Artisan Mid Cap is currently generating about 0.17 per unit of volatility. If you would invest 1,548 in Artisan Mid Cap on November 1, 2024 and sell it today you would earn a total of 41.00 from holding Artisan Mid Cap or generate 2.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Artisan Mid Cap
Performance |
| Timeline |
| General Motors |
| Artisan Mid Cap |
GM and Artisan Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Artisan Mid
The main advantage of trading using opposite GM and Artisan Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Artisan Mid 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 Mid will offset losses from the drop in Artisan Mid's long position.The idea behind General Motors and Artisan Mid Cap pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Artisan Mid vs. Atac Inflation Rotation | Artisan Mid vs. Cref Inflation Linked Bond | Artisan Mid vs. Tiaa Cref Inflation Link | Artisan Mid vs. Credit Suisse Multialternative |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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