Correlation Between Artisan Partners and LithiumBank Resources

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

Diversification Opportunities for Artisan Partners and LithiumBank Resources

0.48

Correlation Coefficient

Artisan Partners  LithiumBank Resources

Very weak diversification

The 3 months correlation between Artisan and LithiumBank is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Partners Asset and LithiumBank Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LithiumBank Resources 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 LithiumBank Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LithiumBank Resources has no effect on the direction of Artisan Partners i.e., Artisan Partners and LithiumBank Resources go up and down completely randomly.

Pair Corralation between Artisan Partners and LithiumBank Resources

Given the investment horizon of 90 days Artisan Partners Asset is expected to generate 0.29 times more return on investment than LithiumBank Resources. However, Artisan Partners Asset is 3.48 times less risky than LithiumBank Resources. It trades about 0.01 of its potential returns per unit of risk. LithiumBank Resources Corp is currently generating about -0.02 per unit of risk. If you would invest  4,239  in Artisan Partners Asset on December 1, 2024 and sell it today you would lose (17.00) from holding Artisan Partners Asset or give up 0.4% of portfolio value over 90 days.

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

Artisan Partners Asset  vs.  LithiumBank Resources Corp

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.

LithiumBank Resources

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LithiumBank Resources Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking signals, LithiumBank Resources may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Artisan Partners and LithiumBank Resources

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

The idea behind Artisan Partners Asset and LithiumBank Resources 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.