Correlation Between Federated Short and Artisan Global

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

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

Diversification Opportunities for Federated Short and Artisan Global

-0.29

Correlation Coefficient

Federated Short  Artisan Global

Very good diversification

The 3 months correlation between Federated and Artisan is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Federated Short Term Income and Artisan Global Unconstrained in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Global Uncon and Federated Short 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 Federated Short Term Income 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 Uncon has no effect on the direction of Federated Short i.e., Federated Short and Artisan Global go up and down completely randomly.

Pair Corralation between Federated Short and Artisan Global

Assuming the 90 days horizon Federated Short is expected to generate 5.54 times less return on investment than Artisan Global. But when comparing it to its historical volatility, Federated Short Term Income is 1.01 times less risky than Artisan Global. It trades about 0.04 of its potential returns per unit of risk. Artisan Global Unconstrained is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  999.00  in Artisan Global Unconstrained on September 13, 2024 and sell it today you would earn a total of  20.00  from holding Artisan Global Unconstrained or generate 2.0% return on investment over 90 days.

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

Federated Short Term Income  vs.  Artisan Global Unconstrained

Federated Short Term

Risk-Adjusted Performance

3 of 100

Insignificant

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

Artisan Global Uncon

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Global Unconstrained are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. 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 Federated Short and Artisan Global

The main advantage of trading using opposite Federated Short and Artisan Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Short 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 Federated Short Term Income and Artisan Global Unconstrained 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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.