Correlation Between Artisan Thematic and Nationwide Global

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

Diversification Opportunities for Artisan Thematic and Nationwide Global

0.69

Correlation Coefficient

Artisan Thematic  Nationwide Global

Poor diversification

The 3 months correlation between Artisan and Nationwide is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Thematic Fund and Nationwide Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Global Equity 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 Nationwide Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Global Equity has no effect on the direction of Artisan Thematic i.e., Artisan Thematic and Nationwide Global go up and down completely randomly.

Pair Corralation between Artisan Thematic and Nationwide Global

Assuming the 90 days horizon Artisan Thematic Fund is expected to under-perform the Nationwide Global. In addition to that, Artisan Thematic is 1.62 times more volatile than Nationwide Global Equity. It trades about -0.09 of its total potential returns per unit of risk. Nationwide Global Equity is currently generating about -0.08 per unit of volatility. If you would invest  2,455  in Nationwide Global Equity on November 29, 2024 and sell it today you would lose (155.00) from holding Nationwide Global Equity or give up 6.31% 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.  Nationwide Global Equity

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.

Nationwide Global Equity

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nationwide Global Equity 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.

Pair Trading with Artisan Thematic and Nationwide Global

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

The idea behind Artisan Thematic Fund and Nationwide Global Equity 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.