Correlation Between Artisan Partners and Suburban Propane

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

Diversification Opportunities for Artisan Partners and Suburban Propane

0.77

Correlation Coefficient

Artisan Partners  Suburban Propane

Poor diversification

The 3 months correlation between Artisan and Suburban is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Partners Asset and Suburban Propane Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suburban Propane Partners 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 Suburban Propane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suburban Propane Partners has no effect on the direction of Artisan Partners i.e., Artisan Partners and Suburban Propane go up and down completely randomly.

Pair Corralation between Artisan Partners and Suburban Propane

Given the investment horizon of 90 days Artisan Partners Asset is expected to generate 1.03 times more return on investment than Suburban Propane. However, Artisan Partners is 1.03 times more volatile than Suburban Propane Partners. It trades about 0.13 of its potential returns per unit of risk. Suburban Propane Partners is currently generating about 0.06 per unit of risk. If you would invest  4,080  in Artisan Partners Asset on September 16, 2024 and sell it today you would earn a total of  616.00  from holding Artisan Partners Asset or generate 15.1% return on investment over 90 days.

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

Artisan Partners Asset  vs.  Suburban Propane Partners

Artisan Partners Asset

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Partners Asset are ranked lower than 10 (%) 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.

Suburban Propane Partners

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Suburban Propane Partners are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Suburban Propane is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Artisan Partners and Suburban Propane

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

The idea behind Artisan Partners Asset and Suburban Propane Partners 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.