Correlation Between Selected American and Artisan Mid
Can any of the company-specific risk be diversified away by investing in both Selected American 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 Selected American and Artisan Mid 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 Mid Cap, you can compare the effects of market volatilities on Selected American 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 Selected American with a short position of Artisan Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Selected American and Artisan Mid.
Diversification Opportunities for Selected American and Artisan Mid
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Selected and Artisan is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Selected American Shares 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 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 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 Selected American i.e., Selected American and Artisan Mid go up and down completely randomly.
Pair Corralation between Selected American and Artisan Mid
Assuming the 90 days horizon Selected American is expected to generate 1.73 times less return on investment than Artisan Mid. But when comparing it to its historical volatility, Selected American Shares is 1.03 times less risky than Artisan Mid. It trades about 0.27 of its potential returns per unit of risk. Artisan Mid Cap is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 3,702 in Artisan Mid Cap on September 1, 2024 and sell it today you would earn a total of 373.00 from holding Artisan Mid Cap or generate 10.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Selected American Shares vs. Artisan Mid Cap
Performance |
| Timeline |
| Selected American Shares |
| Artisan Mid Cap |
Selected American and Artisan Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Selected American and Artisan Mid
The main advantage of trading using opposite Selected American and Artisan Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Selected American 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.| 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 Mid vs. Artisan International Fund | Artisan Mid vs. Artisan Mid Cap | Artisan Mid vs. Total Return Fund | Artisan Mid vs. Growth Fund Of |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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