Correlation Between Artisan Select and Inverse Sp

Can any of the company-specific risk be diversified away by investing in both Artisan Select and Inverse Sp 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 Inverse Sp 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 Inverse Sp 500, you can compare the effects of market volatilities on Artisan Select and Inverse Sp 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 Inverse Sp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Select and Inverse Sp.

Diversification Opportunities for Artisan Select and Inverse Sp

0.03

Correlation Coefficient

Artisan Select  Inverse Sp

Significant diversification

The 3 months correlation between Artisan and Inverse is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Select Equity and Inverse Sp 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inverse Sp 500 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 Inverse Sp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inverse Sp 500 has no effect on the direction of Artisan Select i.e., Artisan Select and Inverse Sp go up and down completely randomly.

Pair Corralation between Artisan Select and Inverse Sp

Assuming the 90 days horizon Artisan Select Equity is expected to generate 0.52 times more return on investment than Inverse Sp. However, Artisan Select Equity is 1.91 times less risky than Inverse Sp. It trades about -0.12 of its potential returns per unit of risk. Inverse Sp 500 is currently generating about -0.12 per unit of risk. If you would invest  1,602  in Artisan Select Equity on October 7, 2024 and sell it today you would lose (55.00) from holding Artisan Select Equity or give up 3.43% of portfolio value over 90 days.

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

Artisan Select Equity  vs.  Inverse Sp 500

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.

Inverse Sp 500

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inverse Sp 500 has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Artisan Select and Inverse Sp

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

The idea behind Artisan Select Equity and Inverse Sp 500 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.