Correlation Between Artisan Thematic and Pace Global

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

Diversification Opportunities for Artisan Thematic and Pace Global

0.39

Correlation Coefficient

Artisan Thematic  Pace Global

Weak diversification

The 3 months correlation between Artisan and Pace is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Thematic Fund and Pace Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace Global Real 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace Global Real has no effect on the direction of Artisan Thematic i.e., Artisan Thematic and Pace Global go up and down completely randomly.

Pair Corralation between Artisan Thematic and Pace Global

Assuming the 90 days horizon Artisan Thematic Fund is expected to generate 1.52 times more return on investment than Pace Global. However, Artisan Thematic is 1.52 times more volatile than Pace Global Real. It trades about -0.01 of its potential returns per unit of risk. Pace Global Real is currently generating about -0.01 per unit of risk. If you would invest  2,237  in Artisan Thematic Fund on December 26, 2024 and sell it today you would lose (25.00) from holding Artisan Thematic Fund or give up 1.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Artisan Thematic Fund  vs.  Pace Global Real

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 Global Real

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pace Global Real has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Pace Global 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 Global

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

The idea behind Artisan Thematic Fund and Pace Global Real 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.