Correlation Between Artisan Partners and CARRIER

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

Diversification Opportunities for Artisan Partners and CARRIER

-0.34

Correlation Coefficient

Artisan Partners  CARRIER

Very good diversification

The 3 months correlation between Artisan and CARRIER is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Partners Asset and CARRIER GLOBAL P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARRIER GLOBAL P 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 CARRIER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARRIER GLOBAL P has no effect on the direction of Artisan Partners i.e., Artisan Partners and CARRIER go up and down completely randomly.

Pair Corralation between Artisan Partners and CARRIER

Given the investment horizon of 90 days Artisan Partners Asset is expected to generate 2.79 times more return on investment than CARRIER. However, Artisan Partners is 2.79 times more volatile than CARRIER GLOBAL P. It trades about 0.13 of its potential returns per unit of risk. CARRIER GLOBAL P is currently generating about -0.11 per unit of risk. If you would invest  4,141  in Artisan Partners Asset on September 17, 2024 and sell it today you would earn a total of  614.00  from holding Artisan Partners Asset or generate 14.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.38%
Values	Daily Returns

Artisan Partners Asset  vs.  CARRIER GLOBAL P

Artisan Partners Asset

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Partners Asset are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Artisan Partners displayed solid returns over the last few months and may actually be approaching a breakup point.

CARRIER GLOBAL P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CARRIER GLOBAL P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CARRIER is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Artisan Partners and CARRIER

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

The idea behind Artisan Partners Asset and CARRIER GLOBAL P 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.