Correlation Between Artisan Thematic and Touchstone Large

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

Diversification Opportunities for Artisan Thematic and Touchstone Large

0.84

Correlation Coefficient

Artisan Thematic  Touchstone Large

Very poor diversification

The 3 months correlation between Artisan and Touchstone is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Thematic Fund and Touchstone Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Large Cap 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 Touchstone Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Large Cap has no effect on the direction of Artisan Thematic i.e., Artisan Thematic and Touchstone Large go up and down completely randomly.

Pair Corralation between Artisan Thematic and Touchstone Large

Assuming the 90 days horizon Artisan Thematic Fund is expected to generate 1.26 times more return on investment than Touchstone Large. However, Artisan Thematic is 1.26 times more volatile than Touchstone Large Cap. It trades about 0.1 of its potential returns per unit of risk. Touchstone Large Cap is currently generating about 0.08 per unit of risk. If you would invest  1,651  in Artisan Thematic Fund on September 4, 2024 and sell it today you would earn a total of  872.00  from holding Artisan Thematic Fund or generate 52.82% return on investment over 90 days.

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

Artisan Thematic Fund  vs.  Touchstone Large Cap

Artisan Thematic

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Thematic Fund are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Artisan Thematic showed solid returns over the last few months and may actually be approaching a breakup point.

Touchstone Large Cap

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Touchstone Large Cap are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Touchstone Large may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Artisan Thematic and Touchstone Large

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

The idea behind Artisan Thematic Fund and Touchstone Large Cap 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.