Correlation Between Artisan Select and Pacific Funds

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

By analyzing existing cross correlation between Artisan Select Equity and Pacific Funds Ultra, you can compare the effects of market volatilities on Artisan Select and Pacific Funds 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 Select with a short position of Pacific Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Select and Pacific Funds.

Diversification Opportunities for Artisan Select and Pacific Funds

0.79

Correlation Coefficient

Artisan Select  Pacific Funds

Poor diversification

The 3 months correlation between Artisan and Pacific is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Select Equity and Pacific Funds Ultra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Funds Ultra and Artisan Select 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 Select Equity are associated (or correlated) with Pacific Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Funds Ultra has no effect on the direction of Artisan Select i.e., Artisan Select and Pacific Funds go up and down completely randomly.

Pair Corralation between Artisan Select and Pacific Funds

Assuming the 90 days horizon Artisan Select Equity is expected to generate 7.77 times more return on investment than Pacific Funds. However, Artisan Select is 7.77 times more volatile than Pacific Funds Ultra. It trades about 0.11 of its potential returns per unit of risk. Pacific Funds Ultra is currently generating about 0.23 per unit of risk. If you would invest  1,058  in Artisan Select Equity on September 12, 2024 and sell it today you would earn a total of  545.00  from holding Artisan Select Equity or generate 51.51% return on investment over 90 days.

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

Artisan Select Equity  vs.  Pacific Funds Ultra

Artisan Select Equity

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Select Equity are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Artisan Select is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pacific Funds Ultra

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pacific Funds Ultra are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Pacific Funds is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Artisan Select and Pacific Funds

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

The idea behind Artisan Select Equity and Pacific Funds Ultra 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.