Correlation Between Rand Capital and Artisan Partners

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Can any of the company-specific risk be diversified away by investing in both Rand Capital 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 Rand Capital and Artisan Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rand Capital Corp and Artisan Partners Asset, you can compare the effects of market volatilities on Rand Capital 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 Rand Capital with a short position of Artisan Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rand Capital and Artisan Partners.

Diversification Opportunities for Rand Capital and Artisan Partners

0.09
  Correlation Coefficient

Significant diversification

The 3 months correlation between Rand and Artisan is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Rand Capital Corp 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 Rand Capital 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 Rand Capital Corp 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 Rand Capital i.e., Rand Capital and Artisan Partners go up and down completely randomly.

Pair Corralation between Rand Capital and Artisan Partners

Given the investment horizon of 90 days Rand Capital Corp is expected to generate 3.07 times more return on investment than Artisan Partners. However, Rand Capital is 3.07 times more volatile than Artisan Partners Asset. It trades about 0.34 of its potential returns per unit of risk. Artisan Partners Asset is currently generating about -0.01 per unit of risk. If you would invest  1,640  in Rand Capital Corp on September 12, 2024 and sell it today you would earn a total of  468.00  from holding Rand Capital Corp or generate 28.54% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

Rand Capital Corp  vs.  Artisan Partners Asset

 Performance 
       Timeline  
Rand Capital Corp 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Rand Capital Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Rand Capital exhibited solid returns over the last few months and may actually be approaching a breakup point.
Artisan Partners Asset 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Partners Asset are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Artisan Partners displayed solid returns over the last few months and may actually be approaching a breakup point.

Rand Capital and Artisan Partners Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Rand Capital and Artisan Partners

The main advantage of trading using opposite Rand Capital and Artisan Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rand Capital 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.
The idea behind Rand Capital Corp and Artisan Partners Asset 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.
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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