Correlation Between Selected American and Artisan International
Can any of the company-specific risk be diversified away by investing in both Selected American and Artisan International 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 Selected American and Artisan International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Selected American Shares and Artisan International Fund, you can compare the effects of market volatilities on Selected American and Artisan International 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 Selected American with a short position of Artisan International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Selected American and Artisan International.
Diversification Opportunities for Selected American and Artisan International
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Selected and Artisan is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Selected American Shares and Artisan International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan International and Selected American 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 Selected American Shares are associated (or correlated) with Artisan International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan International has no effect on the direction of Selected American i.e., Selected American and Artisan International go up and down completely randomly.
Pair Corralation between Selected American and Artisan International
Assuming the 90 days horizon Selected American Shares is expected to generate 1.35 times more return on investment than Artisan International. However, Selected American is 1.35 times more volatile than Artisan International Fund. It trades about 0.07 of its potential returns per unit of risk. Artisan International Fund is currently generating about 0.07 per unit of risk. If you would invest 3,136 in Selected American Shares on August 30, 2024 and sell it today you would earn a total of 1,310 from holding Selected American Shares or generate 41.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Selected American Shares vs. Artisan International Fund
Performance |
| Timeline |
| Selected American Shares |
| Artisan International |
Selected American and Artisan International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Selected American and Artisan International
The main advantage of trading using opposite Selected American and Artisan International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Selected American position performs unexpectedly, Artisan International 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 International will offset losses from the drop in Artisan International's long position.| Selected American vs. Marsico Focus Fund | Selected American vs. Artisan International Fund | Selected American vs. Third Avenue Value | Selected American vs. Oakmark Select Fund |
| Artisan International vs. Artisan Mid Cap | Artisan International vs. Oakmark International Fund | Artisan International vs. Selected American Shares | Artisan International vs. Dodge International Stock |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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