Correlation Between Artisan Mid and Artisan Global

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

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

Diversification Opportunities for Artisan Mid and Artisan Global

0.01

Correlation Coefficient

Artisan Mid  Artisan Global

Significant diversification

The 3 months correlation between Artisan and Artisan is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Mid Cap and Artisan Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Global Equity and Artisan Mid 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 Mid Cap are associated (or correlated) with Artisan Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Global Equity has no effect on the direction of Artisan Mid i.e., Artisan Mid and Artisan Global go up and down completely randomly.

Pair Corralation between Artisan Mid and Artisan Global

Assuming the 90 days horizon Artisan Mid Cap is expected to under-perform the Artisan Global. But the mutual fund apears to be less risky and, when comparing its historical volatility, Artisan Mid Cap is 1.07 times less risky than Artisan Global. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Artisan Global Equity is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,905  in Artisan Global Equity on December 29, 2024 and sell it today you would earn a total of  157.00  from holding Artisan Global Equity or generate 8.24% return on investment over 90 days.

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

Artisan Mid Cap  vs.  Artisan Global Equity

Artisan Mid Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Artisan Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Artisan Mid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Artisan Global Equity

Risk-Adjusted Performance

Good

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

Pair Trading with Artisan Mid and Artisan Global

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

The idea behind Artisan Mid Cap and Artisan Global Equity 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.