Correlation Between Artisan Focus and Artisan Value

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

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

Diversification Opportunities for Artisan Focus and Artisan Value

0.88

Correlation Coefficient

Artisan Focus  Artisan Value

Very poor diversification

The 3 months correlation between Artisan and Artisan is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Focus and Artisan Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Value and Artisan Focus 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 Focus are associated (or correlated) with Artisan Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Value has no effect on the direction of Artisan Focus i.e., Artisan Focus and Artisan Value go up and down completely randomly.

Pair Corralation between Artisan Focus and Artisan Value

Assuming the 90 days horizon Artisan Focus is expected to generate 1.47 times more return on investment than Artisan Value. However, Artisan Focus is 1.47 times more volatile than Artisan Value Fund. It trades about 0.21 of its potential returns per unit of risk. Artisan Value Fund is currently generating about 0.14 per unit of risk. If you would invest  2,227  in Artisan Focus on September 4, 2024 and sell it today you would earn a total of  299.00  from holding Artisan Focus or generate 13.43% return on investment over 90 days.

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

Artisan Focus  vs.  Artisan Value Fund

Artisan Focus

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Focus are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly conflicting basic indicators, Artisan Focus showed solid returns over the last few months and may actually be approaching a breakup point.

Artisan Value

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Value Fund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Artisan Value 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 Focus and Artisan Value

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

The idea behind Artisan Focus and Artisan Value 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.