Correlation Between Artisan Global and Artisan Mid

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

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

Diversification Opportunities for Artisan Global and Artisan Mid

0.88

Correlation Coefficient

Artisan Global  Artisan Mid

Very poor diversification

The 3 months correlation between Artisan and Artisan is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Global Unconstrained 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 Artisan Global 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 Global Unconstrained 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 Artisan Global i.e., Artisan Global and Artisan Mid go up and down completely randomly.

Pair Corralation between Artisan Global and Artisan Mid

Assuming the 90 days horizon Artisan Global is expected to generate 1.31 times less return on investment than Artisan Mid. But when comparing it to its historical volatility, Artisan Global Unconstrained is 8.25 times less risky than Artisan Mid. It trades about 0.25 of its potential returns per unit of risk. Artisan Mid Cap is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  3,824  in Artisan Mid Cap on August 27, 2024 and sell it today you would earn a total of  276.00  from holding Artisan Mid Cap or generate 7.22% return on investment over 90 days.

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

Artisan Global Unconstrained  vs.  Artisan Mid Cap

Artisan Global Uncon

Risk-Adjusted Performance

34 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Global Unconstrained are ranked lower than 34 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Artisan Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Artisan Mid Cap

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Mid Cap are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak primary indicators, Artisan Mid may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Artisan Global and Artisan Mid

The main advantage of trading using opposite Artisan Global and Artisan Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Global 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.

The idea behind Artisan Global Unconstrained and Artisan Mid Cap 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.