Correlation Between Artisan High and MACYS

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

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

Diversification Opportunities for Artisan High and MACYS

-0.57

Correlation Coefficient

Artisan High  MACYS

Excellent diversification

The 3 months correlation between Artisan and MACYS is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Artisan High Income and MACYS RETAIL HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MACYS RETAIL HLDGS and Artisan High 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 High Income are associated (or correlated) with MACYS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MACYS RETAIL HLDGS has no effect on the direction of Artisan High i.e., Artisan High and MACYS go up and down completely randomly.

Pair Corralation between Artisan High and MACYS

Assuming the 90 days horizon Artisan High Income is expected to under-perform the MACYS. But the mutual fund apears to be less risky and, when comparing its historical volatility, Artisan High Income is 6.64 times less risky than MACYS. The mutual fund trades about -0.03 of its potential returns per unit of risk. The MACYS RETAIL HLDGS is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  10,000  in MACYS RETAIL HLDGS on September 24, 2024 and sell it today you would earn a total of  110.00  from holding MACYS RETAIL HLDGS or generate 1.1% return on investment over 90 days.

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

Artisan High Income  vs.  MACYS RETAIL HLDGS

Artisan High Income

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan High Income are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Artisan High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

MACYS RETAIL HLDGS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MACYS RETAIL HLDGS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, MACYS 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 High and MACYS

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

The idea behind Artisan High Income and MACYS RETAIL HLDGS 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.