Correlation Between Artisan Thematic and Artisan Small

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

Diversification Opportunities for Artisan Thematic and Artisan Small

0.75

Correlation Coefficient

Artisan Thematic  Artisan Small

Poor diversification

The 3 months correlation between Artisan and Artisan is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Thematic Fund and Artisan Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Small Cap 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 Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Small Cap has no effect on the direction of Artisan Thematic i.e., Artisan Thematic and Artisan Small go up and down completely randomly.

Pair Corralation between Artisan Thematic and Artisan Small

Assuming the 90 days horizon Artisan Thematic Fund is expected to generate 1.4 times more return on investment than Artisan Small. However, Artisan Thematic is 1.4 times more volatile than Artisan Small Cap. It trades about -0.07 of its potential returns per unit of risk. Artisan Small Cap is currently generating about -0.11 per unit of risk. If you would invest  2,410  in Artisan Thematic Fund on October 7, 2024 and sell it today you would lose (168.00) from holding Artisan Thematic Fund or give up 6.97% of portfolio value over 90 days.

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

Artisan Thematic Fund  vs.  Artisan Small Cap

Artisan Thematic

Risk-Adjusted Performance

0 of 100

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 fairly strong basic indicators, Artisan Thematic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Artisan Small Cap

Risk-Adjusted Performance

0 of 100

Very Weak

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

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

The idea behind Artisan Thematic Fund and Artisan Small Cap 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.