Correlation Between Artisan Thematic and Rational Real

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

Diversification Opportunities for Artisan Thematic and Rational Real

-0.23

Correlation Coefficient

Artisan Thematic  Rational Real

Very good diversification

The 3 months correlation between Artisan and Rational is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Thematic Fund and Rational Real Strategies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rational Real Strategies 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 Rational Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rational Real Strategies has no effect on the direction of Artisan Thematic i.e., Artisan Thematic and Rational Real go up and down completely randomly.

Pair Corralation between Artisan Thematic and Rational Real

Assuming the 90 days horizon Artisan Thematic Fund is expected to under-perform the Rational Real. In addition to that, Artisan Thematic is 21.24 times more volatile than Rational Real Strategies. It trades about -0.02 of its total potential returns per unit of risk. Rational Real Strategies is currently generating about 0.18 per unit of volatility. If you would invest  1,675  in Rational Real Strategies on December 27, 2024 and sell it today you would earn a total of  12.00  from holding Rational Real Strategies or generate 0.72% 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.  Rational Real Strategies

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 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.

Rational Real Strategies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rational Real Strategies are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Rational Real 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 Rational Real

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

The idea behind Artisan Thematic Fund and Rational Real Strategies 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.