Correlation Between Artisan Thematic and Aqr Risk

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

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

Diversification Opportunities for Artisan Thematic and Aqr Risk

0.42

Correlation Coefficient

Artisan Thematic  Aqr Risk

Very weak diversification

The 3 months correlation between Artisan and Aqr is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Thematic Fund and Aqr Risk Parity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Risk Parity and Artisan Thematic 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 Thematic Fund are associated (or correlated) with Aqr Risk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Risk Parity has no effect on the direction of Artisan Thematic i.e., Artisan Thematic and Aqr Risk go up and down completely randomly.

Pair Corralation between Artisan Thematic and Aqr Risk

Assuming the 90 days horizon Artisan Thematic Fund is expected to generate 1.91 times more return on investment than Aqr Risk. However, Artisan Thematic is 1.91 times more volatile than Aqr Risk Parity. It trades about 0.17 of its potential returns per unit of risk. Aqr Risk Parity is currently generating about 0.1 per unit of risk. If you would invest  2,282  in Artisan Thematic Fund on September 12, 2024 and sell it today you would earn a total of  235.00  from holding Artisan Thematic Fund or generate 10.3% return on investment over 90 days.

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

Artisan Thematic Fund  vs.  Aqr Risk Parity

Artisan Thematic

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Thematic Fund are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Artisan Thematic may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Aqr Risk Parity

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aqr Risk Parity are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Aqr Risk 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 Thematic and Aqr Risk

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

The idea behind Artisan Thematic Fund and Aqr Risk Parity 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.