Correlation Between Artisan Partners and Western Union

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

By analyzing existing cross correlation between Artisan Partners Asset and Western Union Co, you can compare the effects of market volatilities on Artisan Partners and Western Union 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 Artisan Partners with a short position of Western Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Partners and Western Union.

Diversification Opportunities for Artisan Partners and Western Union

-0.71

Correlation Coefficient

Artisan Partners  Western Union

Pay attention - limited upside

The 3 months correlation between Artisan and Western is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Partners Asset and Western Union Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Union and Artisan Partners 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 Artisan Partners Asset are associated (or correlated) with Western Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Union has no effect on the direction of Artisan Partners i.e., Artisan Partners and Western Union go up and down completely randomly.

Pair Corralation between Artisan Partners and Western Union

Given the investment horizon of 90 days Artisan Partners Asset is expected to generate 1.94 times more return on investment than Western Union. However, Artisan Partners is 1.94 times more volatile than Western Union Co. It trades about 0.2 of its potential returns per unit of risk. Western Union Co is currently generating about -0.03 per unit of risk. If you would invest  4,372  in Artisan Partners Asset on August 29, 2024 and sell it today you would earn a total of  464.00  from holding Artisan Partners Asset or generate 10.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Artisan Partners Asset  vs.  Western Union Co

Artisan Partners Asset

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Partners Asset are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Artisan Partners displayed solid returns over the last few months and may actually be approaching a breakup point.

Western Union

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Western Union Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Western Union is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Artisan Partners and Western Union

The main advantage of trading using opposite Artisan Partners and Western Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Partners position performs unexpectedly, Western Union 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 Western Union will offset losses from the drop in Western Union's long position.

The idea behind Artisan Partners Asset and Western Union Co 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.