Correlation Between Ford and Artisan Thematic

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

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

Diversification Opportunities for Ford and Artisan Thematic

0.49

Correlation Coefficient

Ford  Artisan Thematic

Very weak diversification

The 3 months correlation between Ford and Artisan is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Artisan Thematic Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Thematic and Ford 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 Ford Motor are associated (or correlated) with Artisan Thematic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Thematic has no effect on the direction of Ford i.e., Ford and Artisan Thematic go up and down completely randomly.

Pair Corralation between Ford and Artisan Thematic

Taking into account the 90-day investment horizon Ford is expected to generate 4.98 times less return on investment than Artisan Thematic. In addition to that, Ford is 2.13 times more volatile than Artisan Thematic Fund. It trades about 0.02 of its total potential returns per unit of risk. Artisan Thematic Fund is currently generating about 0.22 per unit of volatility. If you would invest  2,215  in Artisan Thematic Fund on September 3, 2024 and sell it today you would earn a total of  308.00  from holding Artisan Thematic Fund or generate 13.91% return on investment over 90 days.

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

Ford Motor  vs.  Artisan Thematic Fund

Ford Motor

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ford Motor are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Ford is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Artisan Thematic

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Thematic Fund 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 Thematic showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ford and Artisan Thematic

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

The idea behind Ford Motor and Artisan Thematic 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.

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.