Correlation Between Artisan Partners and SHBASS

Can any of the company-specific risk be diversified away by investing in both Artisan Partners and SHBASS 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 SHBASS 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 SHBASS 365 10 JUN 25, you can compare the effects of market volatilities on Artisan Partners and SHBASS 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 SHBASS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Partners and SHBASS.

Diversification Opportunities for Artisan Partners and SHBASS

-0.29

Correlation Coefficient

Artisan Partners  SHBASS

Very good diversification

The 3 months correlation between Artisan and SHBASS is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Partners Asset and SHBASS 365 10 JUN 25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHBASS 365 10 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 SHBASS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHBASS 365 10 has no effect on the direction of Artisan Partners i.e., Artisan Partners and SHBASS go up and down completely randomly.

Pair Corralation between Artisan Partners and SHBASS

Given the investment horizon of 90 days Artisan Partners Asset is expected to under-perform the SHBASS. In addition to that, Artisan Partners is 2.94 times more volatile than SHBASS 365 10 JUN 25. It trades about -0.05 of its total potential returns per unit of risk. SHBASS 365 10 JUN 25 is currently generating about -0.06 per unit of volatility. If you would invest  9,954  in SHBASS 365 10 JUN 25 on December 24, 2024 and sell it today you would lose (50.00) from holding SHBASS 365 10 JUN 25 or give up 0.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	21.67%
Values	Daily Returns

Artisan Partners Asset  vs.  SHBASS 365 10 JUN 25

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.

SHBASS 365 10

Risk-Adjusted Performance

Very Weak

Over the last 90 days SHBASS 365 10 JUN 25 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SHBASS is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Artisan Partners and SHBASS

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

The idea behind Artisan Partners Asset and SHBASS 365 10 JUN 25 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.

Check out your portfolio center.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.