Correlation Between Artisan Select and Dimensional 2010

Can any of the company-specific risk be diversified away by investing in both Artisan Select and Dimensional 2010 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 Dimensional 2010 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 Dimensional 2010 Target, you can compare the effects of market volatilities on Artisan Select and Dimensional 2010 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 Dimensional 2010. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Select and Dimensional 2010.

Diversification Opportunities for Artisan Select and Dimensional 2010

0.28

Correlation Coefficient

Artisan Select  Dimensional 2010

Modest diversification

The 3 months correlation between Artisan and Dimensional is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Select Equity and Dimensional 2010 Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional 2010 Target 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 Dimensional 2010. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional 2010 Target has no effect on the direction of Artisan Select i.e., Artisan Select and Dimensional 2010 go up and down completely randomly.

Pair Corralation between Artisan Select and Dimensional 2010

Assuming the 90 days horizon Artisan Select Equity is expected to generate 3.14 times more return on investment than Dimensional 2010. However, Artisan Select is 3.14 times more volatile than Dimensional 2010 Target. It trades about 0.03 of its potential returns per unit of risk. Dimensional 2010 Target is currently generating about 0.02 per unit of risk. If you would invest  1,633  in Artisan Select Equity on November 28, 2024 and sell it today you would earn a total of  15.00  from holding Artisan Select Equity or generate 0.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	86.44%
Values	Daily Returns

Artisan Select Equity  vs.  Dimensional 2010 Target

Artisan Select Equity

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Select Equity are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. 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.

Dimensional 2010 Target

Risk-Adjusted Performance

Weak

Over the last 90 days Dimensional 2010 Target has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Dimensional 2010 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 Dimensional 2010

The main advantage of trading using opposite Artisan Select and Dimensional 2010 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Select position performs unexpectedly, Dimensional 2010 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 Dimensional 2010 will offset losses from the drop in Dimensional 2010's long position.

The idea behind Artisan Select Equity and Dimensional 2010 Target 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.