Correlation Between Artisan Select and Artisan Mid

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

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

Diversification Opportunities for Artisan Select and Artisan Mid

0.9

Correlation Coefficient

Artisan Select  Artisan Mid

Almost no diversification

The 3 months correlation between Artisan and Artisan is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Select Equity and Artisan Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Mid Cap and Artisan Select 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 Select Equity are associated (or correlated) with Artisan Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Mid Cap has no effect on the direction of Artisan Select i.e., Artisan Select and Artisan Mid go up and down completely randomly.

Pair Corralation between Artisan Select and Artisan Mid

Assuming the 90 days horizon Artisan Select is expected to generate 2.28 times less return on investment than Artisan Mid. But when comparing it to its historical volatility, Artisan Select Equity is 1.38 times less risky than Artisan Mid. It trades about 0.16 of its potential returns per unit of risk. Artisan Mid Cap is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  4,189  in Artisan Mid Cap on September 5, 2024 and sell it today you would earn a total of  695.00  from holding Artisan Mid Cap or generate 16.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

Artisan Select Equity  vs.  Artisan Mid Cap

Artisan Select Equity

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Select Equity are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Artisan Select may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Artisan Mid Cap

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Mid Cap are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak primary indicators, Artisan Mid showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Artisan Select and Artisan Mid

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

The idea behind Artisan Select Equity and Artisan Mid 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.