Correlation Between Artisan Partners and Loews Corp

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

Diversification Opportunities for Artisan Partners and Loews Corp

0.72

Correlation Coefficient

Artisan Partners  Loews Corp

Poor diversification

The 3 months correlation between Artisan and Loews is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Partners Asset and Loews Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loews Corp 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 Loews Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loews Corp has no effect on the direction of Artisan Partners i.e., Artisan Partners and Loews Corp go up and down completely randomly.

Pair Corralation between Artisan Partners and Loews Corp

Given the investment horizon of 90 days Artisan Partners is expected to generate 11.84 times less return on investment than Loews Corp. In addition to that, Artisan Partners is 1.55 times more volatile than Loews Corp. It trades about 0.0 of its total potential returns per unit of risk. Loews Corp is currently generating about 0.08 per unit of volatility. If you would invest  7,815  in Loews Corp on October 10, 2024 and sell it today you would earn a total of  480.00  from holding Loews Corp or generate 6.14% return on investment over 90 days.

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

Artisan Partners Asset  vs.  Loews Corp

Artisan Partners Asset

Risk-Adjusted Performance

0 of 100

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.

Loews Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Loews Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating essential indicators, Loews Corp may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Artisan Partners and Loews Corp

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

The idea behind Artisan Partners Asset and Loews Corp 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 Transaction History module to view history of all your transactions and understand their impact on performance.