Correlation Between Artisan Consumer and Scepter Holdings

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

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

Diversification Opportunities for Artisan Consumer and Scepter Holdings

-0.42

Correlation Coefficient

Artisan Consumer  Scepter Holdings

Very good diversification

The 3 months correlation between Artisan and Scepter is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Consumer Goods and Scepter Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scepter Holdings and Artisan Consumer 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 Consumer Goods are associated (or correlated) with Scepter Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scepter Holdings has no effect on the direction of Artisan Consumer i.e., Artisan Consumer and Scepter Holdings go up and down completely randomly.

Pair Corralation between Artisan Consumer and Scepter Holdings

Given the investment horizon of 90 days Artisan Consumer Goods is expected to under-perform the Scepter Holdings. But the pink sheet apears to be less risky and, when comparing its historical volatility, Artisan Consumer Goods is 2.55 times less risky than Scepter Holdings. The pink sheet trades about -0.12 of its potential returns per unit of risk. The Scepter Holdings is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  0.10  in Scepter Holdings on December 29, 2024 and sell it today you would earn a total of  0.17  from holding Scepter Holdings or generate 170.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Artisan Consumer Goods  vs.  Scepter Holdings

Artisan Consumer Goods

Risk-Adjusted Performance

Very Weak

Over the last 90 days Artisan Consumer Goods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Scepter Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Scepter Holdings are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Scepter Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Artisan Consumer and Scepter Holdings

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

The idea behind Artisan Consumer Goods and Scepter Holdings 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.

Check out your portfolio center.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.