Correlation Between Artisan Developing and Kennedy Capital

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

By analyzing existing cross correlation between Artisan Developing World and Kennedy Capital Esg, you can compare the effects of market volatilities on Artisan Developing and Kennedy Capital 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 Developing with a short position of Kennedy Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Developing and Kennedy Capital.

Diversification Opportunities for Artisan Developing and Kennedy Capital

0.72

Correlation Coefficient

Artisan Developing  Kennedy Capital

Poor diversification

The 3 months correlation between Artisan and Kennedy is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Developing World and Kennedy Capital Esg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kennedy Capital Esg and Artisan Developing 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 Developing World are associated (or correlated) with Kennedy Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kennedy Capital Esg has no effect on the direction of Artisan Developing i.e., Artisan Developing and Kennedy Capital go up and down completely randomly.

Pair Corralation between Artisan Developing and Kennedy Capital

Assuming the 90 days horizon Artisan Developing World is expected to generate 1.09 times more return on investment than Kennedy Capital. However, Artisan Developing is 1.09 times more volatile than Kennedy Capital Esg. It trades about -0.1 of its potential returns per unit of risk. Kennedy Capital Esg is currently generating about -0.42 per unit of risk. If you would invest  2,237  in Artisan Developing World on September 25, 2024 and sell it today you would lose (46.00) from holding Artisan Developing World or give up 2.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Artisan Developing World  vs.  Kennedy Capital Esg

Artisan Developing World

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Developing World are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Artisan Developing is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Kennedy Capital Esg

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kennedy Capital Esg has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Kennedy Capital 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 Developing and Kennedy Capital

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

The idea behind Artisan Developing World and Kennedy Capital Esg 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.