Correlation Between Artisan Thematic and Pace High

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

Diversification Opportunities for Artisan Thematic and Pace High

0.12

Correlation Coefficient

Artisan Thematic  Pace High

Average diversification

The 3 months correlation between Artisan and Pace is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Thematic Fund and Pace High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace High Yield 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 Pace High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace High Yield has no effect on the direction of Artisan Thematic i.e., Artisan Thematic and Pace High go up and down completely randomly.

Pair Corralation between Artisan Thematic and Pace High

Assuming the 90 days horizon Artisan Thematic Fund is expected to under-perform the Pace High. In addition to that, Artisan Thematic is 8.05 times more volatile than Pace High Yield. It trades about -0.01 of its total potential returns per unit of risk. Pace High Yield is currently generating about 0.08 per unit of volatility. If you would invest  860.00  in Pace High Yield on December 28, 2024 and sell it today you would earn a total of  7.00  from holding Pace High Yield or generate 0.81% return on investment over 90 days.

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

Artisan Thematic Fund  vs.  Pace High Yield

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.

Pace High Yield

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pace High Yield are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pace High 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 Pace High

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

The idea behind Artisan Thematic Fund and Pace High Yield 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.