Correlation Between Amg Managers and Artisan International

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

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

Diversification Opportunities for Amg Managers and Artisan International

0.4

Correlation Coefficient

Amg Managers  Artisan International

Very weak diversification

The 3 months correlation between Amg and Artisan is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Amg Managers Fairpointe and Artisan International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan International and Amg Managers 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 Amg Managers Fairpointe 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 Amg Managers i.e., Amg Managers and Artisan International go up and down completely randomly.

Pair Corralation between Amg Managers and Artisan International

Assuming the 90 days horizon Amg Managers is expected to generate 1.06 times less return on investment than Artisan International. In addition to that, Amg Managers is 1.65 times more volatile than Artisan International Value. It trades about 0.04 of its total potential returns per unit of risk. Artisan International Value is currently generating about 0.07 per unit of volatility. If you would invest  3,712  in Artisan International Value on October 9, 2024 and sell it today you would earn a total of  968.00  from holding Artisan International Value or generate 26.08% return on investment over 90 days.

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

Amg Managers Fairpointe  vs.  Artisan International Value

Amg Managers Fairpointe

Risk-Adjusted Performance

0 of 100

Very Weak

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

Artisan International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Artisan International Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward-looking signals remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Amg Managers and Artisan International

The main advantage of trading using opposite Amg Managers and Artisan International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Managers 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 Amg Managers Fairpointe and Artisan International Value 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.