Correlation Between Artisan Thematic and Dunham Small

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

Diversification Opportunities for Artisan Thematic and Dunham Small

0.89

Correlation Coefficient

Artisan Thematic  Dunham Small

Very poor diversification

The 3 months correlation between Artisan and Dunham is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Thematic Fund and Dunham Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham 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 Dunham Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Small Cap has no effect on the direction of Artisan Thematic i.e., Artisan Thematic and Dunham Small go up and down completely randomly.

Pair Corralation between Artisan Thematic and Dunham Small

Assuming the 90 days horizon Artisan Thematic is expected to generate 1.09 times less return on investment than Dunham Small. But when comparing it to its historical volatility, Artisan Thematic Fund is 1.2 times less risky than Dunham Small. It trades about 0.22 of its potential returns per unit of risk. Dunham Small Cap is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  1,852  in Dunham Small Cap on September 5, 2024 and sell it today you would earn a total of  276.00  from holding Dunham Small Cap or generate 14.9% return on investment over 90 days.

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

Artisan Thematic Fund  vs.  Dunham Small Cap

Artisan Thematic

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Thematic Fund are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Artisan Thematic showed solid returns over the last few months and may actually be approaching a breakup point.

Dunham Small Cap

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dunham Small Cap are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Dunham Small showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Artisan Thematic and Dunham Small

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

The idea behind Artisan Thematic Fund and Dunham 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 Stocks Directory module to find actively traded stocks across global markets.