Correlation Between Cref Money and Artisan Small

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

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

Diversification Opportunities for Cref Money and Artisan Small

-0.08

Correlation Coefficient

Cref Money  Artisan Small

Good diversification

The 3 months correlation between Cref and Artisan is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Cref Money Market 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 Cref Money 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 Cref Money Market 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 Cref Money i.e., Cref Money and Artisan Small go up and down completely randomly.

Pair Corralation between Cref Money and Artisan Small

Assuming the 90 days trading horizon Cref Money is expected to generate 2.18 times less return on investment than Artisan Small. But when comparing it to its historical volatility, Cref Money Market is 54.57 times less risky than Artisan Small. It trades about 0.81 of its potential returns per unit of risk. Artisan Small Cap is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  3,170  in Artisan Small Cap on October 9, 2024 and sell it today you would earn a total of  596.00  from holding Artisan Small Cap or generate 18.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.17%
Values	Daily Returns

Cref Money Market  vs.  Artisan Small Cap

Cref Money Market

Risk-Adjusted Performance

84 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in Cref Money Market are ranked lower than 84 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Cref Money is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Artisan Small Cap

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Small Cap are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Artisan Small is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cref Money and Artisan Small

The main advantage of trading using opposite Cref Money and Artisan Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cref Money 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 Cref Money Market 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.