Correlation Between Artisan Developing and Leland Thomson

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

Diversification Opportunities for Artisan Developing and Leland Thomson

0.78

Correlation Coefficient

Artisan Developing  Leland Thomson

Poor diversification

The 3 months correlation between Artisan and Leland is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Developing World and Leland Thomson Reuters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leland Thomson Reuters 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 Leland Thomson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leland Thomson Reuters has no effect on the direction of Artisan Developing i.e., Artisan Developing and Leland Thomson go up and down completely randomly.

Pair Corralation between Artisan Developing and Leland Thomson

Assuming the 90 days horizon Artisan Developing World is expected to under-perform the Leland Thomson. But the mutual fund apears to be less risky and, when comparing its historical volatility, Artisan Developing World is 1.77 times less risky than Leland Thomson. The mutual fund trades about -0.09 of its potential returns per unit of risk. The Leland Thomson Reuters is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,361  in Leland Thomson Reuters on October 24, 2024 and sell it today you would earn a total of  14.00  from holding Leland Thomson Reuters or generate 0.59% return on investment over 90 days.

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

Artisan Developing World  vs.  Leland Thomson Reuters

Artisan Developing World

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Artisan Developing World has generated negative risk-adjusted returns adding no value to fund investors. 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.

Leland Thomson Reuters

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Leland Thomson Reuters are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Leland Thomson may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Artisan Developing and Leland Thomson

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

The idea behind Artisan Developing World and Leland Thomson Reuters 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.