Correlation Between The Hartford and Artisan Small

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

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

Diversification Opportunities for The Hartford and Artisan Small

0.95

Correlation Coefficient

The Hartford  Artisan Small

Almost no diversification

The 3 months correlation between The and Artisan is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Small 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 The Hartford 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 Small 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 The Hartford i.e., The Hartford and Artisan Small go up and down completely randomly.

Pair Corralation between The Hartford and Artisan Small

Assuming the 90 days horizon The Hartford Small is expected to under-perform the Artisan Small. But the mutual fund apears to be less risky and, when comparing its historical volatility, The Hartford Small is 1.11 times less risky than Artisan Small. The mutual fund trades about -0.09 of its potential returns per unit of risk. The Artisan Small Cap is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  3,567  in Artisan Small Cap on December 29, 2024 and sell it today you would lose (254.00) from holding Artisan Small Cap or give up 7.12% of portfolio value over 90 days.

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

The Hartford Small  vs.  Artisan Small Cap

Hartford Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Hartford Small 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 Small Cap

Risk-Adjusted Performance

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 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.

Pair Trading with The Hartford and Artisan Small

The main advantage of trading using opposite The Hartford and Artisan Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford 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 The Hartford Small 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.