Correlation Between Artisan Emerging and Nuveen Kansas

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

By analyzing existing cross correlation between Artisan Emerging Markets and Nuveen Kansas Municipal, you can compare the effects of market volatilities on Artisan Emerging and Nuveen Kansas 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 Emerging with a short position of Nuveen Kansas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Emerging and Nuveen Kansas.

Diversification Opportunities for Artisan Emerging and Nuveen Kansas

0.7

Correlation Coefficient

Artisan Emerging  Nuveen Kansas

Poor diversification

The 3 months correlation between Artisan and Nuveen is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Emerging Markets and Nuveen Kansas Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Kansas Municipal and Artisan Emerging 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 Emerging Markets are associated (or correlated) with Nuveen Kansas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Kansas Municipal has no effect on the direction of Artisan Emerging i.e., Artisan Emerging and Nuveen Kansas go up and down completely randomly.

Pair Corralation between Artisan Emerging and Nuveen Kansas

Assuming the 90 days horizon Artisan Emerging Markets is expected to generate 1.02 times more return on investment than Nuveen Kansas. However, Artisan Emerging is 1.02 times more volatile than Nuveen Kansas Municipal. It trades about 0.23 of its potential returns per unit of risk. Nuveen Kansas Municipal is currently generating about -0.02 per unit of risk. If you would invest  1,005  in Artisan Emerging Markets on December 27, 2024 and sell it today you would earn a total of  30.00  from holding Artisan Emerging Markets or generate 2.99% return on investment over 90 days.

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

Artisan Emerging Markets  vs.  Nuveen Kansas Municipal

Artisan Emerging Markets

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Emerging Markets are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Artisan Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nuveen Kansas Municipal

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nuveen Kansas Municipal has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Nuveen Kansas 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 Emerging and Nuveen Kansas

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

The idea behind Artisan Emerging Markets and Nuveen Kansas Municipal 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.