Correlation Between Artisan International and Wilmington Large-cap

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

By analyzing existing cross correlation between Artisan International Value and Wilmington Large Cap Strategy, you can compare the effects of market volatilities on Artisan International and Wilmington Large-cap 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 International with a short position of Wilmington Large-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan International and Wilmington Large-cap.

Diversification Opportunities for Artisan International and Wilmington Large-cap

-0.57

Correlation Coefficient

Artisan International  Wilmington Large-cap

Excellent diversification

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

Pair Corralation between Artisan International and Wilmington Large-cap

Assuming the 90 days horizon Artisan International Value is expected to under-perform the Wilmington Large-cap. But the mutual fund apears to be less risky and, when comparing its historical volatility, Artisan International Value is 1.09 times less risky than Wilmington Large-cap. The mutual fund trades about -0.1 of its potential returns per unit of risk. The Wilmington Large Cap Strategy is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  3,166  in Wilmington Large Cap Strategy on September 3, 2024 and sell it today you would earn a total of  305.00  from holding Wilmington Large Cap Strategy or generate 9.63% return on investment over 90 days.

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

Artisan International Value  vs.  Wilmington Large Cap Strategy

Artisan International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Wilmington Large Cap

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Wilmington Large Cap Strategy are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Wilmington Large-cap may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Artisan International and Wilmington Large-cap

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

The idea behind Artisan International Value and Wilmington Large Cap Strategy 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.