Correlation Between State Street and Artisan Thematic
Can any of the company-specific risk be diversified away by investing in both State Street 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 State Street and Artisan Thematic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Street Target and Artisan Thematic Fund, you can compare the effects of market volatilities on State Street 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 State Street with a short position of Artisan Thematic. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and Artisan Thematic.
Diversification Opportunities for State Street and Artisan Thematic
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between State and Artisan is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding State Street Target and Artisan Thematic Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Thematic and State Street 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 State Street Target 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 State Street i.e., State Street and Artisan Thematic go up and down completely randomly.
Pair Corralation between State Street and Artisan Thematic
Assuming the 90 days horizon State Street Target is expected to generate 0.27 times more return on investment than Artisan Thematic. However, State Street Target is 3.68 times less risky than Artisan Thematic. It trades about 0.07 of its potential returns per unit of risk. Artisan Thematic Fund is currently generating about -0.1 per unit of risk. If you would invest 1,668 in State Street Target on September 13, 2024 and sell it today you would earn a total of 26.00 from holding State Street Target or generate 1.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Street Target vs. Artisan Thematic Fund
Performance |
| Timeline |
| State Street Target |
| Artisan Thematic |
State Street and Artisan Thematic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Street and Artisan Thematic
The main advantage of trading using opposite State Street and Artisan Thematic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street 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.| State Street vs. Calvert High Yield | State Street vs. Lgm Risk Managed | State Street vs. Ppm High Yield | State Street vs. California High Yield Municipal |
| Artisan Thematic vs. Ab Global Risk | Artisan Thematic vs. Ppm High Yield | Artisan Thematic vs. Intal High Relative | Artisan Thematic vs. Lgm Risk Managed |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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