Correlation Between Artisan Global and World Energy

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

By analyzing existing cross correlation between Artisan Global Unconstrained and World Energy Fund, you can compare the effects of market volatilities on Artisan Global and World Energy 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 Global with a short position of World Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Global and World Energy.

Diversification Opportunities for Artisan Global and World Energy

0.86

Correlation Coefficient

Artisan Global  World Energy

Very poor diversification

The 3 months correlation between Artisan and World is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Global Unconstrained and World Energy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Energy and Artisan Global 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 Global Unconstrained are associated (or correlated) with World Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Energy has no effect on the direction of Artisan Global i.e., Artisan Global and World Energy go up and down completely randomly.

Pair Corralation between Artisan Global and World Energy

Assuming the 90 days horizon Artisan Global is expected to generate 1.68 times less return on investment than World Energy. But when comparing it to its historical volatility, Artisan Global Unconstrained is 6.94 times less risky than World Energy. It trades about 0.16 of its potential returns per unit of risk. World Energy Fund is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,200  in World Energy Fund on September 18, 2024 and sell it today you would earn a total of  269.00  from holding World Energy Fund or generate 22.42% return on investment over 90 days.

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

Artisan Global Unconstrained  vs.  World Energy Fund

Artisan Global Uncon

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Global Unconstrained are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Artisan Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

World Energy

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in World Energy Fund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, World Energy may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Artisan Global and World Energy

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

The idea behind Artisan Global Unconstrained and World Energy Fund 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.