Correlation Between Artisan Partners and Papaya Growth

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

Diversification Opportunities for Artisan Partners and Papaya Growth

0.27

Correlation Coefficient

Artisan Partners  Papaya Growth

Modest diversification

The 3 months correlation between Artisan and Papaya is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Partners Asset and Papaya Growth Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Papaya Growth Opportunity 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 Papaya Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Papaya Growth Opportunity has no effect on the direction of Artisan Partners i.e., Artisan Partners and Papaya Growth go up and down completely randomly.

Pair Corralation between Artisan Partners and Papaya Growth

Given the investment horizon of 90 days Artisan Partners Asset is expected to generate 3.66 times more return on investment than Papaya Growth. However, Artisan Partners is 3.66 times more volatile than Papaya Growth Opportunity. It trades about 0.12 of its potential returns per unit of risk. Papaya Growth Opportunity is currently generating about 0.05 per unit of risk. If you would invest  4,141  in Artisan Partners Asset on September 17, 2024 and sell it today you would earn a total of  555.00  from holding Artisan Partners Asset or generate 13.4% return on investment over 90 days.

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

Artisan Partners Asset  vs.  Papaya Growth Opportunity

Artisan Partners Asset

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Partners Asset are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Artisan Partners displayed solid returns over the last few months and may actually be approaching a breakup point.

Papaya Growth Opportunity

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Papaya Growth Opportunity are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Papaya Growth is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Artisan Partners and Papaya Growth

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

The idea behind Artisan Partners Asset and Papaya Growth Opportunity 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.