Correlation Between Artisan Small and Lebenthal Lisanti

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

By analyzing existing cross correlation between Artisan Small Cap and Lebenthal Lisanti Small, you can compare the effects of market volatilities on Artisan Small and Lebenthal Lisanti 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 Small with a short position of Lebenthal Lisanti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Small and Lebenthal Lisanti.

Diversification Opportunities for Artisan Small and Lebenthal Lisanti

0.82

Correlation Coefficient

Artisan Small  Lebenthal Lisanti

Very poor diversification

The 3 months correlation between Artisan and Lebenthal is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Small Cap and Lebenthal Lisanti Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lebenthal Lisanti Small and Artisan Small 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 Small Cap are associated (or correlated) with Lebenthal Lisanti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lebenthal Lisanti Small has no effect on the direction of Artisan Small i.e., Artisan Small and Lebenthal Lisanti go up and down completely randomly.

Pair Corralation between Artisan Small and Lebenthal Lisanti

Assuming the 90 days horizon Artisan Small Cap is expected to under-perform the Lebenthal Lisanti. In addition to that, Artisan Small is 1.01 times more volatile than Lebenthal Lisanti Small. It trades about -0.01 of its total potential returns per unit of risk. Lebenthal Lisanti Small is currently generating about 0.09 per unit of volatility. If you would invest  2,024  in Lebenthal Lisanti Small on September 26, 2024 and sell it today you would earn a total of  149.00  from holding Lebenthal Lisanti Small or generate 7.36% return on investment over 90 days.

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

Artisan Small Cap  vs.  Lebenthal Lisanti Small

Artisan Small Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Artisan Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Artisan Small is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Lebenthal Lisanti Small

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lebenthal Lisanti Small are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Lebenthal Lisanti may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Artisan Small and Lebenthal Lisanti

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

The idea behind Artisan Small Cap and Lebenthal Lisanti Small 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.