Correlation Between Artisan International and Northern Large

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

By analyzing existing cross correlation between Artisan International Fund and Northern Large Cap, you can compare the effects of market volatilities on Artisan International and Northern Large 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 Northern Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan International and Northern Large.

Diversification Opportunities for Artisan International and Northern Large

0.28

Correlation Coefficient

Artisan International  Northern Large

Modest diversification

The 3 months correlation between ARTISAN and Northern is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Artisan International Fund and Northern Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Large Cap 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 Fund are associated (or correlated) with Northern Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Large Cap has no effect on the direction of Artisan International i.e., Artisan International and Northern Large go up and down completely randomly.

Pair Corralation between Artisan International and Northern Large

Assuming the 90 days horizon Artisan International Fund is expected to generate 1.11 times more return on investment than Northern Large. However, Artisan International is 1.11 times more volatile than Northern Large Cap. It trades about 0.19 of its potential returns per unit of risk. Northern Large Cap is currently generating about 0.05 per unit of risk. If you would invest  2,698  in Artisan International Fund on December 29, 2024 and sell it today you would earn a total of  282.00  from holding Artisan International Fund or generate 10.45% return on investment over 90 days.

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

Artisan International Fund  vs.  Northern Large Cap

Artisan International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan International Fund are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Artisan International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Northern Large Cap

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Northern Large Cap are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Northern Large 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 International and Northern Large

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

The idea behind Artisan International Fund and Northern Large 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.