Correlation Between Old Republic and Artisan Partners
Can any of the company-specific risk be diversified away by investing in both Old Republic and Artisan Partners 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 Old Republic and Artisan Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Republic International and Artisan Partners Asset, you can compare the effects of market volatilities on Old Republic and Artisan Partners 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 Old Republic with a short position of Artisan Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Republic and Artisan Partners.
Diversification Opportunities for Old Republic and Artisan Partners
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Old and Artisan is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Old Republic International and Artisan Partners Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Partners Asset and Old Republic 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 Old Republic International are associated (or correlated) with Artisan Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Partners Asset has no effect on the direction of Old Republic i.e., Old Republic and Artisan Partners go up and down completely randomly.
Pair Corralation between Old Republic and Artisan Partners
Considering the 90-day investment horizon Old Republic is expected to generate 1.02 times less return on investment than Artisan Partners. But when comparing it to its historical volatility, Old Republic International is 2.05 times less risky than Artisan Partners. It trades about 0.37 of its potential returns per unit of risk. Artisan Partners Asset is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 4,372 in Artisan Partners Asset on August 28, 2024 and sell it today you would earn a total of 422.00 from holding Artisan Partners Asset or generate 9.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Republic International vs. Artisan Partners Asset
Performance |
| Timeline |
| Old Republic Interna |
| Artisan Partners Asset |
Old Republic and Artisan Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Republic and Artisan Partners
The main advantage of trading using opposite Old Republic and Artisan Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Republic position performs unexpectedly, Artisan Partners 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 Partners will offset losses from the drop in Artisan Partners' long position.| Old Republic vs. Axa Equitable Holdings | Old Republic vs. American International Group | Old Republic vs. Arch Capital Group | Old Republic vs. Sun Life Financial |
| Artisan Partners vs. Federated Premier Municipal | Artisan Partners vs. Blackrock Muniyield | Artisan Partners vs. Diamond Hill Investment | Artisan Partners vs. NXG NextGen Infrastructure |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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