Correlation Between Artisan Global and Akre Focus

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

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

Diversification Opportunities for Artisan Global and Akre Focus

0.39

Correlation Coefficient

Artisan Global  Akre Focus

Weak diversification

The 3 months correlation between Artisan and Akre is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Global Value and Akre Focus Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akre Focus Fund and Artisan Global 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 Global Value are associated (or correlated) with Akre Focus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akre Focus Fund has no effect on the direction of Artisan Global i.e., Artisan Global and Akre Focus go up and down completely randomly.

Pair Corralation between Artisan Global and Akre Focus

Assuming the 90 days horizon Artisan Global is expected to generate 6.22 times less return on investment than Akre Focus. But when comparing it to its historical volatility, Artisan Global Value is 1.27 times less risky than Akre Focus. It trades about 0.04 of its potential returns per unit of risk. Akre Focus Fund is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  6,918  in Akre Focus Fund on September 3, 2024 and sell it today you would earn a total of  597.00  from holding Akre Focus Fund or generate 8.63% return on investment over 90 days.

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

Artisan Global Value  vs.  Akre Focus Fund

Artisan Global Value

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Global Value are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Artisan Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Akre Focus Fund

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Akre Focus Fund are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Akre Focus may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Artisan Global and Akre Focus

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

The idea behind Artisan Global Value and Akre Focus 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.