Correlation Between Commodities Strategy and Artisan Thematic
Can any of the company-specific risk be diversified away by investing in both Commodities Strategy and Artisan Thematic 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 Commodities Strategy and Artisan Thematic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commodities Strategy Fund and Artisan Thematic Fund, you can compare the effects of market volatilities on Commodities Strategy and Artisan Thematic 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 Commodities Strategy with a short position of Artisan Thematic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commodities Strategy and Artisan Thematic.
Diversification Opportunities for Commodities Strategy and Artisan Thematic
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Commodities and Artisan is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Commodities Strategy Fund and Artisan Thematic Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Thematic and Commodities Strategy 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 Commodities Strategy Fund are associated (or correlated) with Artisan Thematic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Thematic has no effect on the direction of Commodities Strategy i.e., Commodities Strategy and Artisan Thematic go up and down completely randomly.
Pair Corralation between Commodities Strategy and Artisan Thematic
Assuming the 90 days horizon Commodities Strategy Fund is expected to under-perform the Artisan Thematic. But the mutual fund apears to be less risky and, when comparing its historical volatility, Commodities Strategy Fund is 1.14 times less risky than Artisan Thematic. The mutual fund trades about -0.08 of its potential returns per unit of risk. The Artisan Thematic Fund is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 2,330 in Artisan Thematic Fund on September 3, 2024 and sell it today you would earn a total of 193.00 from holding Artisan Thematic Fund or generate 8.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commodities Strategy Fund vs. Artisan Thematic Fund
Performance |
| Timeline |
| Commodities Strategy |
| Artisan Thematic |
Commodities Strategy and Artisan Thematic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commodities Strategy and Artisan Thematic
The main advantage of trading using opposite Commodities Strategy and Artisan Thematic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commodities Strategy position performs unexpectedly, Artisan Thematic 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 Thematic will offset losses from the drop in Artisan Thematic's long position.The idea behind Commodities Strategy Fund and Artisan Thematic Fund 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.
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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