Correlation Between Associated Capital and Artisan Partners

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

By analyzing existing cross correlation between Associated Capital Group and Artisan Partners Asset, you can compare the effects of market volatilities on Associated Capital and Artisan Partners 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 Associated Capital with a short position of Artisan Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and Artisan Partners.

Diversification Opportunities for Associated Capital and Artisan Partners

0.24

Correlation Coefficient

Associated Capital  Artisan Partners

Modest diversification

The 3 months correlation between Associated and Artisan is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and Artisan Partners Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Partners Asset and Associated Capital 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 Associated Capital Group are associated (or correlated) with Artisan Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Partners Asset has no effect on the direction of Associated Capital i.e., Associated Capital and Artisan Partners go up and down completely randomly.

Pair Corralation between Associated Capital and Artisan Partners

Allowing for the 90-day total investment horizon Associated Capital Group is expected to generate 1.18 times more return on investment than Artisan Partners. However, Associated Capital is 1.18 times more volatile than Artisan Partners Asset. It trades about 0.1 of its potential returns per unit of risk. Artisan Partners Asset is currently generating about 0.05 per unit of risk. If you would invest  3,498  in Associated Capital Group on December 2, 2024 and sell it today you would earn a total of  228.00  from holding Associated Capital Group or generate 6.52% return on investment over 90 days.

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

Associated Capital Group  vs.  Artisan Partners Asset

Associated Capital

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Associated Capital Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Associated Capital is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Artisan Partners Asset

Risk-Adjusted Performance

Very Weak

Over the last 90 days Artisan Partners Asset has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Associated Capital and Artisan Partners

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

The idea behind Associated Capital Group and Artisan Partners Asset 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.