Correlation Between Artisan Thematic and Alphacentric Lifesci

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

Diversification Opportunities for Artisan Thematic and Alphacentric Lifesci

0.73

Correlation Coefficient

Artisan Thematic  Alphacentric Lifesci

Poor diversification

The 3 months correlation between Artisan and Alphacentric is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Thematic Fund and Alphacentric Lifesci Healthcar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphacentric Lifesci 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 Alphacentric Lifesci. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alphacentric Lifesci has no effect on the direction of Artisan Thematic i.e., Artisan Thematic and Alphacentric Lifesci go up and down completely randomly.

Pair Corralation between Artisan Thematic and Alphacentric Lifesci

Assuming the 90 days horizon Artisan Thematic Fund is expected to under-perform the Alphacentric Lifesci. In addition to that, Artisan Thematic is 2.64 times more volatile than Alphacentric Lifesci Healthcare. It trades about -0.1 of its total potential returns per unit of risk. Alphacentric Lifesci Healthcare is currently generating about -0.02 per unit of volatility. If you would invest  1,313  in Alphacentric Lifesci Healthcare on December 3, 2024 and sell it today you would lose (14.00) from holding Alphacentric Lifesci Healthcare or give up 1.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Artisan Thematic Fund  vs.  Alphacentric Lifesci Healthcar

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.

Alphacentric Lifesci

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alphacentric Lifesci Healthcare has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Alphacentric Lifesci 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 Alphacentric Lifesci

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

The idea behind Artisan Thematic Fund and Alphacentric Lifesci Healthcare 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.

Check out your portfolio center.

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.