Correlation Between Artisan Emerging and International Equity

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

Diversification Opportunities for Artisan Emerging and International Equity

0.52

Correlation Coefficient

Artisan Emerging  International Equity

Very weak diversification

The 3 months correlation between Artisan and International is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Emerging Markets and International Equity Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Equity 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 International Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Equity has no effect on the direction of Artisan Emerging i.e., Artisan Emerging and International Equity go up and down completely randomly.

Pair Corralation between Artisan Emerging and International Equity

Assuming the 90 days horizon Artisan Emerging is expected to generate 3.49 times less return on investment than International Equity. But when comparing it to its historical volatility, Artisan Emerging Markets is 4.07 times less risky than International Equity. It trades about 0.22 of its potential returns per unit of risk. International Equity Investor is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  1,379  in International Equity Investor on December 26, 2024 and sell it today you would earn a total of  136.00  from holding International Equity Investor or generate 9.86% return on investment over 90 days.

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

Artisan Emerging Markets  vs.  International Equity Investor

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 17 (%) 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.

International Equity

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in International Equity Investor are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, International Equity may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Artisan Emerging and International Equity

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

The idea behind Artisan Emerging Markets and International Equity Investor 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.