Correlation Between Artisan Thematic and T Rowe

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

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

Diversification Opportunities for Artisan Thematic and T Rowe

0.91

Correlation Coefficient

Artisan Thematic  T Rowe

Almost no diversification

The 3 months correlation between Artisan and TRSAX is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Thematic Fund and T Rowe Price in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Rowe Price and Artisan Thematic 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 Thematic Fund are associated (or correlated) with T Rowe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Rowe Price has no effect on the direction of Artisan Thematic i.e., Artisan Thematic and T Rowe go up and down completely randomly.

Pair Corralation between Artisan Thematic and T Rowe

Assuming the 90 days horizon Artisan Thematic Fund is expected to under-perform the T Rowe. In addition to that, Artisan Thematic is 1.95 times more volatile than T Rowe Price. It trades about -0.01 of its total potential returns per unit of risk. T Rowe Price is currently generating about 0.21 per unit of volatility. If you would invest  9,998  in T Rowe Price on September 12, 2024 and sell it today you would earn a total of  1,227  from holding T Rowe Price or generate 12.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

Artisan Thematic Fund  vs.  T Rowe Price

Artisan Thematic

Risk-Adjusted Performance

0 of 100

Good

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

T Rowe Price

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in T Rowe Price are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, T Rowe may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Artisan Thematic and T Rowe

The main advantage of trading using opposite Artisan Thematic and T Rowe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Thematic position performs unexpectedly, T Rowe 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 T Rowe will offset losses from the drop in T Rowe's long position.

The idea behind Artisan Thematic Fund and T Rowe Price 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.