Correlation Between SP 500 and Artisan Partners
Can any of the company-specific risk be diversified away by investing in both SP 500 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 SP 500 and Artisan Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SP 500 Financials and Artisan Partners Asset, you can compare the effects of market volatilities on SP 500 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 SP 500 with a short position of Artisan Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of SP 500 and Artisan Partners.
Diversification Opportunities for SP 500 and Artisan Partners
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPSY and Artisan is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding SP 500 Financials 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 SP 500 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 SP 500 Financials 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 SP 500 i.e., SP 500 and Artisan Partners go up and down completely randomly.
Pair Corralation between SP 500 and Artisan Partners
Assuming the 90 days trading horizon SP 500 is expected to generate 1.09 times less return on investment than Artisan Partners. But when comparing it to its historical volatility, SP 500 Financials is 1.49 times less risky than Artisan Partners. It trades about 0.35 of its potential returns per unit of risk. Artisan Partners Asset is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 4,372 in Artisan Partners Asset on September 3, 2024 and sell it today you would earn a total of 507.00 from holding Artisan Partners Asset or generate 11.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SP 500 Financials vs. Artisan Partners Asset
Performance |
| Timeline |
SP 500 and Artisan Partners Volatility Contrast
Predicted Return Density |
| Returns |
SP 500 Financials
Pair trading matchups for SP 500
Artisan Partners Asset
Pair trading matchups for Artisan Partners
Pair Trading with SP 500 and Artisan Partners
The main advantage of trading using opposite SP 500 and Artisan Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SP 500 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 SP 500 Financials 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.| Artisan Partners vs. Federated Premier Municipal | Artisan Partners vs. Blackrock Muniyield | Artisan Partners vs. Federated Investors B | Artisan Partners vs. SEI Investments |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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