Correlation Between Artisan Thematic and Consumer Services

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

Diversification Opportunities for Artisan Thematic and Consumer Services

-0.37

Correlation Coefficient

Artisan Thematic  Consumer Services

Very good diversification

The 3 months correlation between Artisan and Consumer is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Thematic Fund and Consumer Services Ultrasector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consumer Services 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 Consumer Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consumer Services has no effect on the direction of Artisan Thematic i.e., Artisan Thematic and Consumer Services go up and down completely randomly.

Pair Corralation between Artisan Thematic and Consumer Services

Assuming the 90 days horizon Artisan Thematic Fund is expected to under-perform the Consumer Services. But the mutual fund apears to be less risky and, when comparing its historical volatility, Artisan Thematic Fund is 1.08 times less risky than Consumer Services. The mutual fund trades about -0.05 of its potential returns per unit of risk. The Consumer Services Ultrasector is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  6,194  in Consumer Services Ultrasector on October 22, 2024 and sell it today you would earn a total of  1,482  from holding Consumer Services Ultrasector or generate 23.93% return on investment over 90 days.

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

Artisan Thematic Fund  vs.  Consumer Services Ultrasector

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 recent stock price disturbance, may contribute to short-term losses for the investors.

Consumer Services

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Consumer Services Ultrasector are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Consumer Services showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Artisan Thematic and Consumer Services

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

The idea behind Artisan Thematic Fund and Consumer Services Ultrasector 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.