Correlation Between Artisan Developing and Conestoga Small

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

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

Diversification Opportunities for Artisan Developing and Conestoga Small

-0.1

Correlation Coefficient

Artisan Developing  Conestoga Small

Good diversification

The 3 months correlation between ARTISAN and Conestoga is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Developing World and Conestoga Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conestoga Small Cap and Artisan Developing 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 Developing World are associated (or correlated) with Conestoga Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conestoga Small Cap has no effect on the direction of Artisan Developing i.e., Artisan Developing and Conestoga Small go up and down completely randomly.

Pair Corralation between Artisan Developing and Conestoga Small

Assuming the 90 days horizon Artisan Developing World is expected to generate 1.19 times more return on investment than Conestoga Small. However, Artisan Developing is 1.19 times more volatile than Conestoga Small Cap. It trades about 0.03 of its potential returns per unit of risk. Conestoga Small Cap is currently generating about -0.17 per unit of risk. If you would invest  2,137  in Artisan Developing World on December 30, 2024 and sell it today you would earn a total of  51.00  from holding Artisan Developing World or generate 2.39% return on investment over 90 days.

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

Artisan Developing World  vs.  Conestoga Small Cap

Artisan Developing World

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Developing World are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Artisan Developing is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Conestoga Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Conestoga Small Cap 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 Developing and Conestoga Small

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

The idea behind Artisan Developing World and Conestoga Small Cap 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.