Correlation Between World Energy and Artisan Global

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

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

Diversification Opportunities for World Energy and Artisan Global

0.86

Correlation Coefficient

World Energy  Artisan Global

Very poor diversification

The 3 months correlation between World and Artisan is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding World Energy Fund and Artisan Global Unconstrained in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Global Uncon and World Energy 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 World Energy Fund are associated (or correlated) with Artisan Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Global Uncon has no effect on the direction of World Energy i.e., World Energy and Artisan Global go up and down completely randomly.

Pair Corralation between World Energy and Artisan Global

Assuming the 90 days horizon World Energy Fund is expected to generate 6.94 times more return on investment than Artisan Global. However, World Energy is 6.94 times more volatile than Artisan Global Unconstrained. It trades about 0.04 of its potential returns per unit of risk. Artisan Global Unconstrained is currently generating about 0.16 per unit of risk. If you would invest  1,200  in World Energy Fund on September 18, 2024 and sell it today you would earn a total of  269.00  from holding World Energy Fund or generate 22.42% return on investment over 90 days.

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

World Energy Fund  vs.  Artisan Global Unconstrained

World Energy

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in World Energy Fund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, World Energy may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Artisan Global Uncon

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Global Unconstrained are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Artisan Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with World Energy and Artisan Global

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

The idea behind World Energy Fund and Artisan Global Unconstrained 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 Stocks Directory module to find actively traded stocks across global markets.