Correlation Between Baron Global and Artisan Global

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

By analyzing existing cross correlation between Baron Global Advantage and Artisan Global Opportunities, you can compare the effects of market volatilities on Baron Global and Artisan Global 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 Baron Global with a short position of Artisan Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Global and Artisan Global.

Diversification Opportunities for Baron Global and Artisan Global

0.87

Correlation Coefficient

Baron Global  Artisan Global

Very poor diversification

The 3 months correlation between Baron and Artisan is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Baron Global Advantage and Artisan Global Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Global Oppor and Baron Global 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 Baron Global Advantage are associated (or correlated) with Artisan Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Global Oppor has no effect on the direction of Baron Global i.e., Baron Global and Artisan Global go up and down completely randomly.

Pair Corralation between Baron Global and Artisan Global

Assuming the 90 days horizon Baron Global Advantage is expected to under-perform the Artisan Global. In addition to that, Baron Global is 1.47 times more volatile than Artisan Global Opportunities. It trades about -0.08 of its total potential returns per unit of risk. Artisan Global Opportunities is currently generating about -0.03 per unit of volatility. If you would invest  3,188  in Artisan Global Opportunities on December 29, 2024 and sell it today you would lose (89.00) from holding Artisan Global Opportunities or give up 2.79% of portfolio value over 90 days.

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

Baron Global Advantage  vs.  Artisan Global Opportunities

Baron Global Advantage

Risk-Adjusted Performance

Very Weak

Over the last 90 days Baron Global Advantage has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Artisan Global Oppor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Artisan Global Opportunities has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Artisan Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Baron Global and Artisan Global

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

The idea behind Baron Global Advantage and Artisan Global Opportunities 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.