Correlation Between Artisan Emerging and Growth Strategy

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

By analyzing existing cross correlation between Artisan Emerging Markets and Growth Strategy Fund, you can compare the effects of market volatilities on Artisan Emerging and Growth Strategy 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 Emerging with a short position of Growth Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Emerging and Growth Strategy.

Diversification Opportunities for Artisan Emerging and Growth Strategy

0.85

Correlation Coefficient

Artisan Emerging  Growth Strategy

Very poor diversification

The 3 months correlation between Artisan and GROWTH is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Emerging Markets and Growth Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Strategy and Artisan Emerging 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 Emerging Markets are associated (or correlated) with Growth Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Strategy has no effect on the direction of Artisan Emerging i.e., Artisan Emerging and Growth Strategy go up and down completely randomly.

Pair Corralation between Artisan Emerging and Growth Strategy

Assuming the 90 days horizon Artisan Emerging is expected to generate 2.13 times less return on investment than Growth Strategy. But when comparing it to its historical volatility, Artisan Emerging Markets is 2.41 times less risky than Growth Strategy. It trades about 0.15 of its potential returns per unit of risk. Growth Strategy Fund is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,284  in Growth Strategy Fund on August 31, 2024 and sell it today you would earn a total of  54.00  from holding Growth Strategy Fund or generate 4.21% return on investment over 90 days.

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

Artisan Emerging Markets  vs.  Growth Strategy Fund

Artisan Emerging Markets

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Emerging Markets are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Artisan Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Growth Strategy

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Growth Strategy Fund are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Growth Strategy 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 Emerging and Growth Strategy

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

The idea behind Artisan Emerging Markets and Growth Strategy Fund 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.