Correlation Between Qs Large and Artisan Thematic

Can any of the company-specific risk be diversified away by investing in both Qs Large 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 Qs Large and Artisan Thematic into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Qs Large Cap and Artisan Thematic Fund, you can compare the effects of market volatilities on Qs Large 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 Qs Large with a short position of Artisan Thematic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qs Large and Artisan Thematic.

Diversification Opportunities for Qs Large and Artisan Thematic

0.98

Correlation Coefficient

Qs Large  Artisan Thematic

Almost no diversification

The 3 months correlation between LMUSX and Artisan is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Qs Large Cap and Artisan Thematic Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Thematic and Qs Large 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 Qs Large Cap 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 Qs Large i.e., Qs Large and Artisan Thematic go up and down completely randomly.

Pair Corralation between Qs Large and Artisan Thematic

Assuming the 90 days horizon Qs Large Cap is expected to under-perform the Artisan Thematic. But the mutual fund apears to be less risky and, when comparing its historical volatility, Qs Large Cap is 1.17 times less risky than Artisan Thematic. The mutual fund trades about -0.12 of its potential returns per unit of risk. The Artisan Thematic Fund is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  2,140  in Artisan Thematic Fund on January 31, 2024 and sell it today you would lose (47.00) from holding Artisan Thematic Fund or give up 2.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Qs Large Cap  vs.  Artisan Thematic Fund

Qs Large Cap

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Qs Large Cap are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Qs Large may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Artisan Thematic

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Thematic Fund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Artisan Thematic may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Qs Large and Artisan Thematic

The main advantage of trading using opposite Qs Large and Artisan Thematic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qs Large 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 Qs Large Cap 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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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.