Correlation Between Artisan Select and Chartwell Small

Can any of the company-specific risk be diversified away by investing in both Artisan Select and Chartwell Small 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 Select and Chartwell Small into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Artisan Select Equity and Chartwell Small Cap, you can compare the effects of market volatilities on Artisan Select and Chartwell Small 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 Select with a short position of Chartwell Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Select and Chartwell Small.

Diversification Opportunities for Artisan Select and Chartwell Small

0.87

Correlation Coefficient

Artisan Select  Chartwell Small

Very poor diversification

The 3 months correlation between Artisan and Chartwell is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Select Equity and Chartwell Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chartwell Small Cap and Artisan Select 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 Select Equity are associated (or correlated) with Chartwell Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chartwell Small Cap has no effect on the direction of Artisan Select i.e., Artisan Select and Chartwell Small go up and down completely randomly.

Pair Corralation between Artisan Select and Chartwell Small

Assuming the 90 days horizon Artisan Select is expected to generate 1.64 times less return on investment than Chartwell Small. But when comparing it to its historical volatility, Artisan Select Equity is 1.89 times less risky than Chartwell Small. It trades about 0.08 of its potential returns per unit of risk. Chartwell Small Cap is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,249  in Chartwell Small Cap on October 4, 2024 and sell it today you would earn a total of  440.00  from holding Chartwell Small Cap or generate 35.23% return on investment over 90 days.

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

Artisan Select Equity  vs.  Chartwell Small Cap

Artisan Select Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Artisan Select Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Artisan Select is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Chartwell Small Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chartwell Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Chartwell Small is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Artisan Select and Chartwell Small

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

The idea behind Artisan Select Equity and Chartwell Small Cap 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.