Correlation Between Artisan Thematic and Great-west Core

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

Diversification Opportunities for Artisan Thematic and Great-west Core

0.7

Correlation Coefficient

Artisan Thematic  Great-west Core

Poor diversification

The 3 months correlation between Artisan and Great-west is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Thematic Fund and Great West E Strategies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great-west Core 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 Great-west Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great-west Core has no effect on the direction of Artisan Thematic i.e., Artisan Thematic and Great-west Core go up and down completely randomly.

Pair Corralation between Artisan Thematic and Great-west Core

Assuming the 90 days horizon Artisan Thematic Fund is expected to generate 1.53 times more return on investment than Great-west Core. However, Artisan Thematic is 1.53 times more volatile than Great West E Strategies. It trades about -0.01 of its potential returns per unit of risk. Great West E Strategies is currently generating about -0.04 per unit of risk. If you would invest  2,184  in Artisan Thematic Fund on December 28, 2024 and sell it today you would lose (31.00) from holding Artisan Thematic Fund or give up 1.42% 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.  Great West E 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.

Great-west Core

Risk-Adjusted Performance

Very Weak

Over the last 90 days Great West E Strategies has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Great-west Core 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 Great-west Core

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

The idea behind Artisan Thematic Fund and Great West E 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.