Correlation Between Artisan Small and Grizzly Short

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

Diversification Opportunities for Artisan Small and Grizzly Short

-0.38

Correlation Coefficient

Artisan Small  Grizzly Short

Very good diversification

The 3 months correlation between Artisan and Grizzly is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Small Cap and Grizzly Short Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grizzly Short 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 Grizzly Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grizzly Short has no effect on the direction of Artisan Small i.e., Artisan Small and Grizzly Short go up and down completely randomly.

Pair Corralation between Artisan Small and Grizzly Short

Assuming the 90 days horizon Artisan Small Cap is expected to under-perform the Grizzly Short. In addition to that, Artisan Small is 1.6 times more volatile than Grizzly Short Fund. It trades about -0.11 of its total potential returns per unit of risk. Grizzly Short Fund is currently generating about -0.07 per unit of volatility. If you would invest  566.00  in Grizzly Short Fund on October 7, 2024 and sell it today you would lose (16.00) from holding Grizzly Short Fund or give up 2.83% of portfolio value over 90 days.

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

Artisan Small Cap  vs.  Grizzly Short Fund

Artisan Small Cap

Risk-Adjusted Performance

0 of 100

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

Grizzly Short

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grizzly Short Fund 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.

Pair Trading with Artisan Small and Grizzly Short

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

The idea behind Artisan Small Cap and Grizzly Short Fund 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.