Correlation Between Csjxx and Artisan Small

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

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

Diversification Opportunities for Csjxx and Artisan Small

-0.47

Correlation Coefficient

Csjxx  Artisan Small

Very good diversification

The 3 months correlation between Csjxx and Artisan is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Csjxx and Artisan Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Small Cap and Csjxx 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 Csjxx are associated (or correlated) with Artisan Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Small Cap has no effect on the direction of Csjxx i.e., Csjxx and Artisan Small go up and down completely randomly.

Pair Corralation between Csjxx and Artisan Small

Assuming the 90 days horizon Csjxx is expected to generate 44.99 times more return on investment than Artisan Small. However, Csjxx is 44.99 times more volatile than Artisan Small Cap. It trades about 0.23 of its potential returns per unit of risk. Artisan Small Cap is currently generating about -0.23 per unit of risk. If you would invest  100.00  in Csjxx on October 10, 2024 and sell it today you would earn a total of  335.00  from holding Csjxx or generate 335.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

Csjxx  vs.  Artisan Small Cap

Csjxx

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Csjxx are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Csjxx showed solid returns over the last few months and may actually be approaching a breakup point.

Artisan Small Cap

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Csjxx and Artisan Small

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

The idea behind Csjxx and Artisan Small Cap 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.