Correlation Between Artisan Emerging and The Gold

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

Diversification Opportunities for Artisan Emerging and The Gold

0.9

Correlation Coefficient

Artisan Emerging  The Gold

Almost no diversification

The 3 months correlation between Artisan and The is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Emerging Markets and The Gold Bullion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Bullion 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 The Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Bullion has no effect on the direction of Artisan Emerging i.e., Artisan Emerging and The Gold go up and down completely randomly.

Pair Corralation between Artisan Emerging and The Gold

Assuming the 90 days horizon Artisan Emerging is expected to generate 4.98 times less return on investment than The Gold. But when comparing it to its historical volatility, Artisan Emerging Markets is 4.14 times less risky than The Gold. It trades about 0.23 of its potential returns per unit of risk. The Gold Bullion is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  2,033  in The Gold Bullion on December 28, 2024 and sell it today you would earn a total of  305.00  from holding The Gold Bullion or generate 15.0% return on investment over 90 days.

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

Artisan Emerging Markets  vs.  The Gold Bullion

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.

Gold Bullion

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in The Gold Bullion are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, The Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Artisan Emerging and The Gold

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

The idea behind Artisan Emerging Markets and The Gold Bullion 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.