Correlation Between Nebraska Municipal and Artisan Mid

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

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

Diversification Opportunities for Nebraska Municipal and Artisan Mid

0.65

Correlation Coefficient

Nebraska Municipal  Artisan Mid

Poor diversification

The 3 months correlation between Nebraska and Artisan is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Nebraska Municipal Fund and Artisan Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Mid Cap and Nebraska 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 Nebraska Municipal Fund are associated (or correlated) with Artisan Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Mid Cap has no effect on the direction of Nebraska Municipal i.e., Nebraska Municipal and Artisan Mid go up and down completely randomly.

Pair Corralation between Nebraska Municipal and Artisan Mid

Assuming the 90 days horizon Nebraska Municipal Fund is expected to generate 0.3 times more return on investment than Artisan Mid. However, Nebraska Municipal Fund is 3.3 times less risky than Artisan Mid. It trades about -0.05 of its potential returns per unit of risk. Artisan Mid Cap is currently generating about -0.16 per unit of risk. If you would invest  932.00  in Nebraska Municipal Fund on October 9, 2024 and sell it today you would lose (4.00) from holding Nebraska Municipal Fund or give up 0.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.5%
Values	Daily Returns

Nebraska Municipal Fund  vs.  Artisan Mid Cap

Nebraska Municipal

Risk-Adjusted Performance

0 of 100

Very Weak

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

Artisan Mid Cap

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Nebraska Municipal and Artisan Mid

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

The idea behind Nebraska Municipal Fund and Artisan Mid 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 Transaction History module to view history of all your transactions and understand their impact on performance.