Correlation Between Capital One and Artisan Partners

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

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

Diversification Opportunities for Capital One and Artisan Partners

0.95

Correlation Coefficient

Capital One  Artisan Partners

Almost no diversification

The 3 months correlation between Capital and Artisan is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Capital One Financial 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 Capital One 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 Capital One Financial 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 Capital One i.e., Capital One and Artisan Partners go up and down completely randomly.

Pair Corralation between Capital One and Artisan Partners

Considering the 90-day investment horizon Capital One is expected to generate 1.04 times less return on investment than Artisan Partners. In addition to that, Capital One is 1.13 times more volatile than Artisan Partners Asset. It trades about 0.13 of its total potential returns per unit of risk. Artisan Partners Asset is currently generating about 0.15 per unit of volatility. If you would invest  3,907  in Artisan Partners Asset on May 6, 2025 and sell it today you would earn a total of  577.00  from holding Artisan Partners Asset or generate 14.77% return on investment over 90 days.

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

Capital One Financial  vs.  Artisan Partners Asset

Capital One Financial

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Capital One Financial are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Capital One reported solid returns over the last few months and may actually be approaching a breakup point.

Artisan Partners Asset

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Partners Asset are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Artisan Partners displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Capital One and Artisan Partners

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

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.