Correlation Between Thornburg Value and Artisan Emerging

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

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

Diversification Opportunities for Thornburg Value and Artisan Emerging

0.81

Correlation Coefficient

Thornburg Value  Artisan Emerging

Very poor diversification

The 3 months correlation between Thornburg and Artisan is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg Value Fund and Artisan Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Emerging Markets and Thornburg Value 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 Thornburg Value Fund are associated (or correlated) with Artisan Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Emerging Markets has no effect on the direction of Thornburg Value i.e., Thornburg Value and Artisan Emerging go up and down completely randomly.

Pair Corralation between Thornburg Value and Artisan Emerging

Assuming the 90 days horizon Thornburg Value Fund is expected to generate 5.11 times more return on investment than Artisan Emerging. However, Thornburg Value is 5.11 times more volatile than Artisan Emerging Markets. It trades about 0.21 of its potential returns per unit of risk. Artisan Emerging Markets is currently generating about 0.15 per unit of risk. If you would invest  7,329  in Thornburg Value Fund on September 4, 2024 and sell it today you would earn a total of  1,140  from holding Thornburg Value Fund or generate 15.55% return on investment over 90 days.

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

Thornburg Value Fund  vs.  Artisan Emerging Markets

Thornburg Value

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Thornburg Value Fund are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Thornburg Value showed solid returns over the last few months and may actually be approaching a breakup point.

Artisan Emerging Markets

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Emerging Markets are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Artisan Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Thornburg Value and Artisan Emerging

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

The idea behind Thornburg Value Fund and Artisan Emerging Markets 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.