Correlation Between Artisan High and Clearbridge Small

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

By analyzing existing cross correlation between Artisan High Income and Clearbridge Small Cap, you can compare the effects of market volatilities on Artisan High and Clearbridge Small 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 High with a short position of Clearbridge Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan High and Clearbridge Small.

Diversification Opportunities for Artisan High and Clearbridge Small

0.82

Correlation Coefficient

Artisan High  Clearbridge Small

Very poor diversification

The 3 months correlation between Artisan and Clearbridge is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Artisan High Income and Clearbridge Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Small Cap and Artisan High 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 High Income are associated (or correlated) with Clearbridge Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Small Cap has no effect on the direction of Artisan High i.e., Artisan High and Clearbridge Small go up and down completely randomly.

Pair Corralation between Artisan High and Clearbridge Small

Assuming the 90 days horizon Artisan High Income is expected to generate 0.07 times more return on investment than Clearbridge Small. However, Artisan High Income is 13.63 times less risky than Clearbridge Small. It trades about 0.27 of its potential returns per unit of risk. Clearbridge Small Cap is currently generating about -0.09 per unit of risk. If you would invest  911.00  in Artisan High Income on September 15, 2024 and sell it today you would earn a total of  8.00  from holding Artisan High Income or generate 0.88% return on investment over 90 days.

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

Artisan High Income  vs.  Clearbridge Small Cap

Artisan High Income

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan High Income are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Artisan High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Clearbridge Small Cap

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Clearbridge Small Cap are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Clearbridge Small 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 High and Clearbridge Small

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

The idea behind Artisan High Income and Clearbridge Small Cap 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.