Correlation Between Artisan Mid and Wasatch Ultra

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

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

Diversification Opportunities for Artisan Mid and Wasatch Ultra

0.72

Correlation Coefficient

Artisan Mid  Wasatch Ultra

Poor diversification

The 3 months correlation between Artisan and Wasatch is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Mid Cap and Wasatch Ultra Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wasatch Ultra Growth and Artisan Mid 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 Mid Cap are associated (or correlated) with Wasatch Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wasatch Ultra Growth has no effect on the direction of Artisan Mid i.e., Artisan Mid and Wasatch Ultra go up and down completely randomly.

Pair Corralation between Artisan Mid and Wasatch Ultra

Assuming the 90 days horizon Artisan Mid is expected to generate 1.44 times less return on investment than Wasatch Ultra. But when comparing it to its historical volatility, Artisan Mid Cap is 1.48 times less risky than Wasatch Ultra. It trades about 0.04 of its potential returns per unit of risk. Wasatch Ultra Growth is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,874  in Wasatch Ultra Growth on October 11, 2024 and sell it today you would earn a total of  616.00  from holding Wasatch Ultra Growth or generate 21.43% return on investment over 90 days.

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

Artisan Mid Cap  vs.  Wasatch Ultra Growth

Artisan Mid Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Artisan Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Artisan Mid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Wasatch Ultra Growth

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wasatch Ultra Growth are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Wasatch Ultra 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 Mid and Wasatch Ultra

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

The idea behind Artisan Mid Cap and Wasatch Ultra Growth 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.