Correlation Between Artisan Thematic and Energy Basic

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

Diversification Opportunities for Artisan Thematic and Energy Basic

0.29

Correlation Coefficient

Artisan Thematic  Energy Basic

Modest diversification

The 3 months correlation between Artisan and Energy is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Thematic Fund and Energy Basic Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Basic Materials 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 Energy Basic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Basic Materials has no effect on the direction of Artisan Thematic i.e., Artisan Thematic and Energy Basic go up and down completely randomly.

Pair Corralation between Artisan Thematic and Energy Basic

Assuming the 90 days horizon Artisan Thematic Fund is expected to generate 0.84 times more return on investment than Energy Basic. However, Artisan Thematic Fund is 1.19 times less risky than Energy Basic. It trades about 0.11 of its potential returns per unit of risk. Energy Basic Materials is currently generating about 0.01 per unit of risk. If you would invest  1,588  in Artisan Thematic Fund on September 12, 2024 and sell it today you would earn a total of  929.00  from holding Artisan Thematic Fund or generate 58.5% return on investment over 90 days.

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

Artisan Thematic Fund  vs.  Energy Basic Materials

Artisan Thematic

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Thematic Fund are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Artisan Thematic may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Energy Basic Materials

Risk-Adjusted Performance

0 of 100

Weak

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

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

The idea behind Artisan Thematic Fund and Energy Basic Materials 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 Commodity Directory module to find actively traded commodities issued by global exchanges.