Correlation Between Artisan Select and Gmo Us

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

Diversification Opportunities for Artisan Select and Gmo Us

0.06

Correlation Coefficient

Artisan Select  Gmo Us

Significant diversification

The 3 months correlation between Artisan and Gmo is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Select Equity and Gmo Equity Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Equity Allocation 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 Gmo Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Equity Allocation has no effect on the direction of Artisan Select i.e., Artisan Select and Gmo Us go up and down completely randomly.

Pair Corralation between Artisan Select and Gmo Us

Assuming the 90 days horizon Artisan Select Equity is expected to generate 0.8 times more return on investment than Gmo Us. However, Artisan Select Equity is 1.25 times less risky than Gmo Us. It trades about 0.16 of its potential returns per unit of risk. Gmo Equity Allocation is currently generating about -0.07 per unit of risk. If you would invest  1,538  in Artisan Select Equity on December 28, 2024 and sell it today you would earn a total of  121.00  from holding Artisan Select Equity or generate 7.87% return on investment over 90 days.

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

Artisan Select Equity  vs.  Gmo Equity Allocation

Artisan Select Equity

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Select Equity are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Artisan Select may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Gmo Equity Allocation

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gmo Equity Allocation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Gmo Us 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 Gmo Us

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

The idea behind Artisan Select Equity and Gmo Equity Allocation 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.