Correlation Between Blackrock Enhanced and Artisan Value

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

By analyzing existing cross correlation between Blackrock Enhanced Equity and Artisan Value Fund, you can compare the effects of market volatilities on Blackrock Enhanced and Artisan Value 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 Blackrock Enhanced with a short position of Artisan Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Enhanced and Artisan Value.

Diversification Opportunities for Blackrock Enhanced and Artisan Value

0.82

Correlation Coefficient

Blackrock Enhanced  Artisan Value

Very poor diversification

The 3 months correlation between Blackrock and ARTISAN is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Enhanced Equity and Artisan Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Value and Blackrock Enhanced 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 Blackrock Enhanced Equity are associated (or correlated) with Artisan Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Value has no effect on the direction of Blackrock Enhanced i.e., Blackrock Enhanced and Artisan Value go up and down completely randomly.

Pair Corralation between Blackrock Enhanced and Artisan Value

Considering the 90-day investment horizon Blackrock Enhanced Equity is expected to generate 1.1 times more return on investment than Artisan Value. However, Blackrock Enhanced is 1.1 times more volatile than Artisan Value Fund. It trades about 0.13 of its potential returns per unit of risk. Artisan Value Fund is currently generating about 0.04 per unit of risk. If you would invest  813.00  in Blackrock Enhanced Equity on December 30, 2024 and sell it today you would earn a total of  51.00  from holding Blackrock Enhanced Equity or generate 6.27% return on investment over 90 days.

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

Blackrock Enhanced Equity  vs.  Artisan Value Fund

Blackrock Enhanced Equity

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Enhanced Equity are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively weak fundamental indicators, Blackrock Enhanced may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Artisan Value

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Value Fund are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Artisan Value is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Blackrock Enhanced and Artisan Value

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

The idea behind Blackrock Enhanced Equity and Artisan Value 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.