Correlation Between Hartford Municipal and Artisan Emerging

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

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

Diversification Opportunities for Hartford Municipal and Artisan Emerging

-0.21

Correlation Coefficient

Hartford Municipal  Artisan Emerging

Very good diversification

The 3 months correlation between Hartford and Artisan is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Municipal and Artisan Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Emerging Markets and Hartford Municipal 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 The Hartford Municipal are associated (or correlated) with Artisan Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Emerging Markets has no effect on the direction of Hartford Municipal i.e., Hartford Municipal and Artisan Emerging go up and down completely randomly.

Pair Corralation between Hartford Municipal and Artisan Emerging

Assuming the 90 days horizon Hartford Municipal is expected to generate 2.7 times less return on investment than Artisan Emerging. But when comparing it to its historical volatility, The Hartford Municipal is 1.27 times less risky than Artisan Emerging. It trades about 0.08 of its potential returns per unit of risk. Artisan Emerging Markets is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  944.00  in Artisan Emerging Markets on September 13, 2024 and sell it today you would earn a total of  84.00  from holding Artisan Emerging Markets or generate 8.9% return on investment over 90 days.

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

The Hartford Municipal  vs.  Artisan Emerging Markets

The Hartford Municipal

Risk-Adjusted Performance

0 of 100

Very Weak

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

Artisan Emerging Markets

Risk-Adjusted Performance

5 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Emerging Markets are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Artisan Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hartford Municipal and Artisan Emerging

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

The idea behind The Hartford Municipal and Artisan Emerging Markets 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.