Correlation Between Strategic Equity and Artisan Select

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

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

Diversification Opportunities for Strategic Equity and Artisan Select

0.76

Correlation Coefficient

Strategic Equity  Artisan Select

Poor diversification

The 3 months correlation between Strategic and Artisan is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Equity Portfolio and Artisan Select Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Select Equity and Strategic Equity 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 Strategic Equity Portfolio are associated (or correlated) with Artisan Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Select Equity has no effect on the direction of Strategic Equity i.e., Strategic Equity and Artisan Select go up and down completely randomly.

Pair Corralation between Strategic Equity and Artisan Select

Assuming the 90 days horizon Strategic Equity Portfolio is expected to under-perform the Artisan Select. But the mutual fund apears to be less risky and, when comparing its historical volatility, Strategic Equity Portfolio is 1.08 times less risky than Artisan Select. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Artisan Select Equity is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  1,551  in Artisan Select Equity on October 22, 2024 and sell it today you would earn a total of  36.00  from holding Artisan Select Equity or generate 2.32% return on investment over 90 days.

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

Strategic Equity Portfolio  vs.  Artisan Select Equity

Strategic Equity Por

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Strategic Equity Portfolio 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 Select Equity

Risk-Adjusted Performance

3 of 100

Insignificant

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

Pair Trading with Strategic Equity and Artisan Select

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

The idea behind Strategic Equity Portfolio and Artisan Select Equity 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.