Correlation Between Artisan Partners and Above Food

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

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

Diversification Opportunities for Artisan Partners and Above Food

0.16

Correlation Coefficient

Artisan Partners  Above Food

Average diversification

The 3 months correlation between Artisan and Above is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Partners Asset and Above Food Ingredients in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Above Food Ingredients and Artisan Partners 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 Artisan Partners Asset are associated (or correlated) with Above Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Above Food Ingredients has no effect on the direction of Artisan Partners i.e., Artisan Partners and Above Food go up and down completely randomly.

Pair Corralation between Artisan Partners and Above Food

Given the investment horizon of 90 days Artisan Partners Asset is expected to under-perform the Above Food. But the stock apears to be less risky and, when comparing its historical volatility, Artisan Partners Asset is 6.37 times less risky than Above Food. The stock trades about -0.03 of its potential returns per unit of risk. The Above Food Ingredients is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2.69  in Above Food Ingredients on December 26, 2024 and sell it today you would lose (0.42) from holding Above Food Ingredients or give up 15.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Artisan Partners Asset  vs.  Above Food Ingredients

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 very healthy basic indicators, Artisan Partners is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Above Food Ingredients

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Above Food Ingredients are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Above Food showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Artisan Partners and Above Food

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

The idea behind Artisan Partners Asset and Above Food Ingredients 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.