Correlation Between Artisan International and Blackrock Advantage

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

By analyzing existing cross correlation between Artisan International Small and Blackrock Advantage Small, you can compare the effects of market volatilities on Artisan International and Blackrock Advantage 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 International with a short position of Blackrock Advantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan International and Blackrock Advantage.

Diversification Opportunities for Artisan International and Blackrock Advantage

-0.12

Correlation Coefficient

Artisan International  Blackrock Advantage

Good diversification

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

Pair Corralation between Artisan International and Blackrock Advantage

Assuming the 90 days horizon Artisan International is expected to generate 10.26 times less return on investment than Blackrock Advantage. But when comparing it to its historical volatility, Artisan International Small is 1.52 times less risky than Blackrock Advantage. It trades about 0.02 of its potential returns per unit of risk. Blackrock Advantage Small is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,766  in Blackrock Advantage Small on September 5, 2024 and sell it today you would earn a total of  235.00  from holding Blackrock Advantage Small or generate 13.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Artisan International Small  vs.  Blackrock Advantage Small

Artisan International

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan International Small are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward-looking indicators, Artisan International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Blackrock Advantage Small

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Advantage Small are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Blackrock Advantage showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Artisan International and Blackrock Advantage

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

The idea behind Artisan International Small and Blackrock Advantage Small 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.