Correlation Between Artisan Developing and Midcap Growth

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

Diversification Opportunities for Artisan Developing and Midcap Growth

0.81

Correlation Coefficient

Artisan Developing  Midcap Growth

Very poor diversification

The 3 months correlation between Artisan and Midcap is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Developing World and Midcap Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midcap Growth 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 Midcap Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midcap Growth has no effect on the direction of Artisan Developing i.e., Artisan Developing and Midcap Growth go up and down completely randomly.

Pair Corralation between Artisan Developing and Midcap Growth

Assuming the 90 days horizon Artisan Developing World is expected to generate 0.94 times more return on investment than Midcap Growth. However, Artisan Developing World is 1.06 times less risky than Midcap Growth. It trades about 0.11 of its potential returns per unit of risk. Midcap Growth Fund is currently generating about 0.09 per unit of risk. If you would invest  1,620  in Artisan Developing World on October 9, 2024 and sell it today you would earn a total of  514.00  from holding Artisan Developing World or generate 31.73% return on investment over 90 days.

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

Artisan Developing World  vs.  Midcap Growth Fund

Artisan Developing World

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Developing World are ranked lower than 1 (%) 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.

Midcap Growth

Risk-Adjusted Performance

9 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Midcap Growth Fund are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Midcap Growth may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Artisan Developing and Midcap Growth

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

The idea behind Artisan Developing World and Midcap Growth 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.

Check out your portfolio center.

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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.