Correlation Between Artisan Thematic and Commonwealth Global

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

Diversification Opportunities for Artisan Thematic and Commonwealth Global

0.41

Correlation Coefficient

Artisan Thematic  Commonwealth Global

Very weak diversification

The 3 months correlation between Artisan and Commonwealth is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Thematic Fund and Commonwealth Global Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commonwealth Global 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 Commonwealth Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commonwealth Global has no effect on the direction of Artisan Thematic i.e., Artisan Thematic and Commonwealth Global go up and down completely randomly.

Pair Corralation between Artisan Thematic and Commonwealth Global

Assuming the 90 days horizon Artisan Thematic Fund is expected to generate 1.37 times more return on investment than Commonwealth Global. However, Artisan Thematic is 1.37 times more volatile than Commonwealth Global Fund. It trades about 0.21 of its potential returns per unit of risk. Commonwealth Global Fund is currently generating about 0.05 per unit of risk. If you would invest  2,215  in Artisan Thematic Fund on August 31, 2024 and sell it today you would earn a total of  283.00  from holding Artisan Thematic Fund or generate 12.78% 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.  Commonwealth Global Fund

Artisan Thematic

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Thematic Fund are ranked lower than 16 (%) 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 December 2024.

Commonwealth Global

Risk-Adjusted Performance

3 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Commonwealth Global Fund are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Commonwealth Global 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 Commonwealth Global

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

The idea behind Artisan Thematic Fund and Commonwealth Global 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.