Correlation Between Artisan Global and Transamerica Large

Can any of the company-specific risk be diversified away by investing in both Artisan Global and Transamerica 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 Global and Transamerica Large 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 Transamerica Large Core, you can compare the effects of market volatilities on Artisan Global and Transamerica 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 Global with a short position of Transamerica Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Global and Transamerica Large.

Diversification Opportunities for Artisan Global and Transamerica Large

0.73

Correlation Coefficient

Artisan Global  Transamerica Large

Poor diversification

The 3 months correlation between Artisan and Transamerica is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Global Opportunities and Transamerica Large Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Large Core 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 Transamerica Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Large Core has no effect on the direction of Artisan Global i.e., Artisan Global and Transamerica Large go up and down completely randomly.

Pair Corralation between Artisan Global and Transamerica Large

Assuming the 90 days horizon Artisan Global Opportunities is expected to generate 1.16 times more return on investment than Transamerica Large. However, Artisan Global is 1.16 times more volatile than Transamerica Large Core. It trades about 0.22 of its potential returns per unit of risk. Transamerica Large Core is currently generating about 0.1 per unit of risk. If you would invest  3,242  in Artisan Global Opportunities on October 27, 2024 and sell it today you would earn a total of  125.00  from holding Artisan Global Opportunities or generate 3.86% 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.  Transamerica Large Core

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 fairly strong basic indicators, Artisan Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Transamerica Large Core

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Transamerica Large Core has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Artisan Global and Transamerica Large

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

The idea behind Artisan Global Opportunities and Transamerica Large Core 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.