Correlation Between Artisan Partners and Jiangsu Expressway

Can any of the company-specific risk be diversified away by investing in both Artisan Partners and Jiangsu Expressway 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 Jiangsu Expressway 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 Jiangsu Expressway Co, you can compare the effects of market volatilities on Artisan Partners and Jiangsu Expressway 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 Jiangsu Expressway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Partners and Jiangsu Expressway.

Diversification Opportunities for Artisan Partners and Jiangsu Expressway

-0.25

Correlation Coefficient

Artisan Partners  Jiangsu Expressway

Very good diversification

The 3 months correlation between Artisan and Jiangsu is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Partners Asset and Jiangsu Expressway Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Expressway 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 Jiangsu Expressway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Expressway has no effect on the direction of Artisan Partners i.e., Artisan Partners and Jiangsu Expressway go up and down completely randomly.

Pair Corralation between Artisan Partners and Jiangsu Expressway

Given the investment horizon of 90 days Artisan Partners is expected to generate 1.96 times less return on investment than Jiangsu Expressway. But when comparing it to its historical volatility, Artisan Partners Asset is 2.65 times less risky than Jiangsu Expressway. It trades about 0.05 of its potential returns per unit of risk. Jiangsu Expressway Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,655  in Jiangsu Expressway Co on October 4, 2024 and sell it today you would earn a total of  595.00  from holding Jiangsu Expressway Co or generate 35.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Artisan Partners Asset  vs.  Jiangsu Expressway Co

Artisan Partners Asset

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Partners Asset are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Jiangsu Expressway

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jiangsu Expressway Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Jiangsu Expressway may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Artisan Partners and Jiangsu Expressway

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

The idea behind Artisan Partners Asset and Jiangsu Expressway Co 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.