Correlation Between Rondure New and Artisan Thematic

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

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

Diversification Opportunities for Rondure New and Artisan Thematic

0.22

Correlation Coefficient

Rondure New  Artisan Thematic

Modest diversification

The 3 months correlation between Rondure and Artisan is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Rondure New World and Artisan Thematic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Thematic and Rondure New 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 Rondure New World 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 Rondure New i.e., Rondure New and Artisan Thematic go up and down completely randomly.

Pair Corralation between Rondure New and Artisan Thematic

Assuming the 90 days horizon Rondure New is expected to generate 6.91 times less return on investment than Artisan Thematic. But when comparing it to its historical volatility, Rondure New World is 2.61 times less risky than Artisan Thematic. It trades about 0.08 of its potential returns per unit of risk. Artisan Thematic is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  2,201  in Artisan Thematic on September 2, 2024 and sell it today you would earn a total of  304.00  from holding Artisan Thematic or generate 13.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	92.19%
Values	Daily Returns

Rondure New World  vs.  Artisan Thematic

Rondure New World

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Rondure New World are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Rondure New is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Artisan Thematic

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Thematic 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 Rondure New and Artisan Thematic

The main advantage of trading using opposite Rondure New and Artisan Thematic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rondure New 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 Rondure New World and Artisan Thematic 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.