Correlation Between Baron Small and Artisan Mid

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

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

Diversification Opportunities for Baron Small and Artisan Mid

0.73

Correlation Coefficient

Baron Small  Artisan Mid

Poor diversification

The 3 months correlation between Baron and Artisan is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Baron Small Cap and Artisan Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Mid Cap and Baron Small 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 Baron Small Cap are associated (or correlated) with Artisan Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Mid Cap has no effect on the direction of Baron Small i.e., Baron Small and Artisan Mid go up and down completely randomly.

Pair Corralation between Baron Small and Artisan Mid

Assuming the 90 days horizon Baron Small Cap is expected to generate 1.15 times more return on investment than Artisan Mid. However, Baron Small is 1.15 times more volatile than Artisan Mid Cap. It trades about 0.11 of its potential returns per unit of risk. Artisan Mid Cap is currently generating about -0.03 per unit of risk. If you would invest  3,352  in Baron Small Cap on September 15, 2024 and sell it today you would earn a total of  247.00  from holding Baron Small Cap or generate 7.37% return on investment over 90 days.

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

Baron Small Cap  vs.  Artisan Mid Cap

Baron Small Cap

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Baron Small Cap are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Baron Small may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Artisan Mid Cap

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Baron Small and Artisan Mid

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

The idea behind Baron Small Cap and Artisan Mid 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.