Correlation Between Artisan Small and Strategic Bond

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

Diversification Opportunities for Artisan Small and Strategic Bond

-0.57

Correlation Coefficient

Artisan Small  Strategic Bond

Excellent diversification

The 3 months correlation between Artisan and Strategic is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Small Cap and Strategic Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Bond 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 Strategic Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Bond has no effect on the direction of Artisan Small i.e., Artisan Small and Strategic Bond go up and down completely randomly.

Pair Corralation between Artisan Small and Strategic Bond

Assuming the 90 days horizon Artisan Small Cap is expected to generate 4.49 times more return on investment than Strategic Bond. However, Artisan Small is 4.49 times more volatile than Strategic Bond Fund. It trades about 0.09 of its potential returns per unit of risk. Strategic Bond Fund is currently generating about -0.12 per unit of risk. If you would invest  3,488  in Artisan Small Cap on September 12, 2024 and sell it today you would earn a total of  256.00  from holding Artisan Small Cap or generate 7.34% return on investment over 90 days.

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

Artisan Small Cap  vs.  Strategic Bond Fund

Artisan Small Cap

Risk-Adjusted Performance

6 of 100

Modest

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

Strategic Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Strategic Bond Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Strategic Bond 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 Small and Strategic Bond

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

The idea behind Artisan Small Cap and Strategic Bond 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.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.