Correlation Between Artisan Thematic and Artisan Value

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

Diversification Opportunities for Artisan Thematic and Artisan Value

0.93

Correlation Coefficient

Artisan Thematic  Artisan Value

Almost no diversification

The 3 months correlation between Artisan and Artisan is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Thematic Fund and Artisan Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Value 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 Artisan Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Value has no effect on the direction of Artisan Thematic i.e., Artisan Thematic and Artisan Value go up and down completely randomly.

Pair Corralation between Artisan Thematic and Artisan Value

Assuming the 90 days horizon Artisan Thematic Fund is expected to under-perform the Artisan Value. In addition to that, Artisan Thematic is 2.01 times more volatile than Artisan Value Fund. It trades about -0.1 of its total potential returns per unit of risk. Artisan Value Fund is currently generating about -0.09 per unit of volatility. If you would invest  1,593  in Artisan Value Fund on December 3, 2024 and sell it today you would lose (86.00) from holding Artisan Value Fund or give up 5.4% of portfolio value over 90 days.

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

Artisan Thematic Fund  vs.  Artisan Value Fund

Artisan Thematic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Artisan Thematic Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Artisan Value

Risk-Adjusted Performance

Very Weak

Over the last 90 days Artisan Value Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong essential indicators, Artisan Value 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 Artisan Value

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

The idea behind Artisan Thematic Fund and Artisan Value 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.

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.