Correlation Between Artisan Global and Akre Focus

Can any of the company-specific risk be diversified away by investing in both Artisan Global and Akre Focus 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 Global and Akre Focus into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Artisan Global Value and Akre Focus Fund, you can compare the effects of market volatilities on Artisan Global and Akre Focus 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 Global with a short position of Akre Focus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Global and Akre Focus.

Diversification Opportunities for Artisan Global and Akre Focus

0.63

Correlation Coefficient

Artisan Global  Akre Focus

Poor diversification

The 3 months correlation between Artisan and Akre is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Global Value and Akre Focus Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akre Focus Fund and Artisan Global 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 Global Value are associated (or correlated) with Akre Focus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akre Focus Fund has no effect on the direction of Artisan Global i.e., Artisan Global and Akre Focus go up and down completely randomly.

Pair Corralation between Artisan Global and Akre Focus

Assuming the 90 days horizon Artisan Global Value is expected to under-perform the Akre Focus. In addition to that, Artisan Global is 1.06 times more volatile than Akre Focus Fund. It trades about -0.24 of its total potential returns per unit of risk. Akre Focus Fund is currently generating about -0.2 per unit of volatility. If you would invest  7,021  in Akre Focus Fund on October 9, 2024 and sell it today you would lose (297.00) from holding Akre Focus Fund or give up 4.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.0%
Values	Daily Returns

Artisan Global Value  vs.  Akre Focus Fund

Artisan Global Value

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Artisan Global Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Artisan Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Akre Focus Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Akre Focus Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Akre Focus 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 Global and Akre Focus

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

The idea behind Artisan Global Value and Akre Focus Fund 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.