Correlation Between Artisan Global and First Eagle

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

By analyzing existing cross correlation between Artisan Global Opportunities and First Eagle Smid, you can compare the effects of market volatilities on Artisan Global and First Eagle 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 Global with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Global and First Eagle.

Diversification Opportunities for Artisan Global and First Eagle

0.67

Correlation Coefficient

Artisan Global  First Eagle

Poor diversification

The 3 months correlation between Artisan and First is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Global Opportunities and First Eagle Smid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Smid and Artisan Global 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 Global Opportunities are associated (or correlated) with First Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Eagle Smid has no effect on the direction of Artisan Global i.e., Artisan Global and First Eagle go up and down completely randomly.

Pair Corralation between Artisan Global and First Eagle

Assuming the 90 days horizon Artisan Global Opportunities is expected to under-perform the First Eagle. In addition to that, Artisan Global is 1.72 times more volatile than First Eagle Smid. It trades about -0.1 of its total potential returns per unit of risk. First Eagle Smid is currently generating about 0.05 per unit of volatility. If you would invest  1,163  in First Eagle Smid on October 23, 2024 and sell it today you would earn a total of  32.00  from holding First Eagle Smid or generate 2.75% return on investment over 90 days.

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

Artisan Global Opportunities  vs.  First Eagle Smid

Artisan Global Oppor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Artisan Global Opportunities has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

First Eagle Smid

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in First Eagle Smid are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, First Eagle 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 Global and First Eagle

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

The idea behind Artisan Global Opportunities and First Eagle Smid 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.