Correlation Between Artisan Partners and Bluerock Homes

Can any of the company-specific risk be diversified away by investing in both Artisan Partners and Bluerock Homes 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 Bluerock Homes 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 Bluerock Homes Trust, you can compare the effects of market volatilities on Artisan Partners and Bluerock Homes 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 Bluerock Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Partners and Bluerock Homes.

Diversification Opportunities for Artisan Partners and Bluerock Homes

-0.52

Correlation Coefficient

Artisan Partners  Bluerock Homes

Excellent diversification

The 3 months correlation between Artisan and Bluerock is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Partners Asset and Bluerock Homes Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluerock Homes Trust 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 Bluerock Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluerock Homes Trust has no effect on the direction of Artisan Partners i.e., Artisan Partners and Bluerock Homes go up and down completely randomly.

Pair Corralation between Artisan Partners and Bluerock Homes

Given the investment horizon of 90 days Artisan Partners Asset is expected to generate 0.9 times more return on investment than Bluerock Homes. However, Artisan Partners Asset is 1.11 times less risky than Bluerock Homes. It trades about 0.08 of its potential returns per unit of risk. Bluerock Homes Trust is currently generating about -0.06 per unit of risk. If you would invest  4,196  in Artisan Partners Asset on September 20, 2024 and sell it today you would earn a total of  381.00  from holding Artisan Partners Asset or generate 9.08% return on investment over 90 days.

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

Artisan Partners Asset  vs.  Bluerock Homes Trust

Artisan Partners Asset

Risk-Adjusted Performance

6 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Partners Asset are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Artisan Partners may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Bluerock Homes Trust

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Bluerock Homes Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's technical indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Artisan Partners and Bluerock Homes

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

The idea behind Artisan Partners Asset and Bluerock Homes Trust 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.