Correlation Between Kopernik International and Artisan Emerging

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

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

Diversification Opportunities for Kopernik International and Artisan Emerging

0.81

Correlation Coefficient

Kopernik International  Artisan Emerging

Very poor diversification

The 3 months correlation between Kopernik and Artisan is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Kopernik International Fund 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 Kopernik International 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 Kopernik International Fund 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 Kopernik International i.e., Kopernik International and Artisan Emerging go up and down completely randomly.

Pair Corralation between Kopernik International and Artisan Emerging

Assuming the 90 days horizon Kopernik International Fund is expected to under-perform the Artisan Emerging. In addition to that, Kopernik International is 1.6 times more volatile than Artisan Emerging Markets. It trades about -0.43 of its total potential returns per unit of risk. Artisan Emerging Markets is currently generating about -0.24 per unit of volatility. If you would invest  1,768  in Artisan Emerging Markets on October 12, 2024 and sell it today you would lose (49.00) from holding Artisan Emerging Markets or give up 2.77% of portfolio value over 90 days.

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

Kopernik International Fund  vs.  Artisan Emerging Markets

Kopernik International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kopernik International Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Artisan Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Artisan Emerging Markets 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 Kopernik International and Artisan Emerging

The main advantage of trading using opposite Kopernik International and Artisan Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kopernik International 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 Kopernik International Fund 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.