Correlation Between Sanlam Global and Artemisome

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

By analyzing existing cross correlation between Sanlam Global Artificial and Artemisome I, you can compare the effects of market volatilities on Sanlam Global and Artemisome 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 Sanlam Global with a short position of Artemisome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanlam Global and Artemisome.

Diversification Opportunities for Sanlam Global and Artemisome

0.06

Correlation Coefficient

Sanlam Global  Artemisome

Significant diversification

The 3 months correlation between Sanlam and Artemisome is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Sanlam Global Artificial and Artemisome I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artemisome I and Sanlam Global 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 Sanlam Global Artificial are associated (or correlated) with Artemisome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artemisome I has no effect on the direction of Sanlam Global i.e., Sanlam Global and Artemisome go up and down completely randomly.

Pair Corralation between Sanlam Global and Artemisome

Assuming the 90 days trading horizon Sanlam Global Artificial is expected to under-perform the Artemisome. In addition to that, Sanlam Global is 2.1 times more volatile than Artemisome I. It trades about -0.13 of its total potential returns per unit of risk. Artemisome I is currently generating about 0.12 per unit of volatility. If you would invest  28,611  in Artemisome I on December 29, 2024 and sell it today you would earn a total of  1,405  from holding Artemisome I or generate 4.91% return on investment over 90 days.

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

Sanlam Global Artificial  vs.  Artemisome I

Sanlam Global Artificial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sanlam Global Artificial has generated negative risk-adjusted returns adding no value to fund investors. Even with latest weak performance, the Fund's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the fund retail investors.

Artemisome I

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Artemisome I are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. Despite quite persistent forward-looking signals, Artemisome is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Sanlam Global and Artemisome

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

The idea behind Sanlam Global Artificial and Artemisome I 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 Commodity Directory module to find actively traded commodities issued by global exchanges.