Correlation Between Artisan Small and Fpa New

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

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

Diversification Opportunities for Artisan Small and Fpa New

-0.18

Correlation Coefficient

Artisan Small  Fpa New

Good diversification

The 3 months correlation between Artisan and Fpa is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Small Cap and Fpa New Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fpa New Income and Artisan Small 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 Small Cap are associated (or correlated) with Fpa New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fpa New Income has no effect on the direction of Artisan Small i.e., Artisan Small and Fpa New go up and down completely randomly.

Pair Corralation between Artisan Small and Fpa New

Assuming the 90 days horizon Artisan Small Cap is expected to under-perform the Fpa New. In addition to that, Artisan Small is 8.32 times more volatile than Fpa New Income. It trades about -0.15 of its total potential returns per unit of risk. Fpa New Income is currently generating about 0.14 per unit of volatility. If you would invest  978.00  in Fpa New Income on December 1, 2024 and sell it today you would earn a total of  14.00  from holding Fpa New Income or generate 1.43% return on investment over 90 days.

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

Artisan Small Cap  vs.  Fpa New Income

Artisan Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Artisan Small Cap 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 April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Fpa New Income

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fpa New Income are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Fpa New 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 Small and Fpa New

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

The idea behind Artisan Small Cap and Fpa New Income 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.