Correlation Between Artisan Developing and Artisan Global

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

Diversification Opportunities for Artisan Developing and Artisan Global

-0.08

Correlation Coefficient

Artisan Developing  Artisan Global

Good diversification

The 3 months correlation between Artisan and Artisan is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Developing World and Artisan Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Global Equity 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 Artisan Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Global Equity has no effect on the direction of Artisan Developing i.e., Artisan Developing and Artisan Global go up and down completely randomly.

Pair Corralation between Artisan Developing and Artisan Global

Assuming the 90 days horizon Artisan Developing World is expected to generate 0.64 times more return on investment than Artisan Global. However, Artisan Developing World is 1.57 times less risky than Artisan Global. It trades about 0.23 of its potential returns per unit of risk. Artisan Global Equity is currently generating about -0.1 per unit of risk. If you would invest  2,013  in Artisan Developing World on September 14, 2024 and sell it today you would earn a total of  276.00  from holding Artisan Developing World or generate 13.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Artisan Developing World  vs.  Artisan Global Equity

Artisan Developing World

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Developing World are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Artisan Developing showed solid returns over the last few months and may actually be approaching a breakup point.

Artisan Global Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Artisan Global Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Artisan Developing and Artisan Global

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

The idea behind Artisan Developing World and Artisan Global Equity 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.