Correlation Between Clipper Fund and Artisan International

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

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

Diversification Opportunities for Clipper Fund and Artisan International

0.28

Correlation Coefficient

Clipper Fund  Artisan International

Modest diversification

The 3 months correlation between Clipper and Artisan is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Clipper Fund Inc and Artisan International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan International and Clipper Fund 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 Clipper Fund Inc are associated (or correlated) with Artisan International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan International has no effect on the direction of Clipper Fund i.e., Clipper Fund and Artisan International go up and down completely randomly.

Pair Corralation between Clipper Fund and Artisan International

Assuming the 90 days horizon Clipper Fund is expected to generate 5.87 times less return on investment than Artisan International. In addition to that, Clipper Fund is 1.07 times more volatile than Artisan International Fund. It trades about 0.04 of its total potential returns per unit of risk. Artisan International Fund is currently generating about 0.25 per unit of volatility. If you would invest  2,701  in Artisan International Fund on December 21, 2024 and sell it today you would earn a total of  355.00  from holding Artisan International Fund or generate 13.14% return on investment over 90 days.

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

Clipper Fund Inc  vs.  Artisan International Fund

Clipper Fund

Risk-Adjusted Performance

Insignificant

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

Artisan International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan International Fund are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Artisan International showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Clipper Fund and Artisan International

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

The idea behind Clipper Fund Inc and Artisan International 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.