Correlation Between Artisan Select and Horizon Funds

Can any of the company-specific risk be diversified away by investing in both Artisan Select and Horizon Funds 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 Horizon Funds 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 Horizon Funds , you can compare the effects of market volatilities on Artisan Select and Horizon Funds 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 Horizon Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Select and Horizon Funds.

Diversification Opportunities for Artisan Select and Horizon Funds

0.9

Correlation Coefficient

Artisan Select  Horizon Funds

Almost no diversification

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

Pair Corralation between Artisan Select and Horizon Funds

Assuming the 90 days horizon Artisan Select Equity is expected to generate 3.26 times more return on investment than Horizon Funds. However, Artisan Select is 3.26 times more volatile than Horizon Funds . It trades about 0.1 of its potential returns per unit of risk. Horizon Funds is currently generating about 0.04 per unit of risk. If you would invest  1,542  in Artisan Select Equity on October 24, 2024 and sell it today you would earn a total of  74.00  from holding Artisan Select Equity or generate 4.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.33%
Values	Daily Returns

Artisan Select Equity  vs.  Horizon Funds

Artisan Select Equity

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Select Equity are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Artisan Select is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Horizon Funds

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Horizon Funds are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Horizon Funds 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 Select and Horizon Funds

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

The idea behind Artisan Select Equity and Horizon Funds 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.