Correlation Between City National and Artisan High

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

By analyzing existing cross correlation between City National Rochdale and Artisan High Income, you can compare the effects of market volatilities on City National and Artisan High 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 City National with a short position of Artisan High. Check out your portfolio center. Please also check ongoing floating volatility patterns of City National and Artisan High.

Diversification Opportunities for City National and Artisan High

0.91

Correlation Coefficient

City National  Artisan High

Almost no diversification

The 3 months correlation between City and Artisan is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding City National Rochdale and Artisan High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan High Income and City National 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 City National Rochdale are associated (or correlated) with Artisan High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan High Income has no effect on the direction of City National i.e., City National and Artisan High go up and down completely randomly.

Pair Corralation between City National and Artisan High

Assuming the 90 days horizon City National is expected to generate 4.19 times less return on investment than Artisan High. In addition to that, City National is 1.13 times more volatile than Artisan High Income. It trades about 0.03 of its total potential returns per unit of risk. Artisan High Income is currently generating about 0.14 per unit of volatility. If you would invest  896.00  in Artisan High Income on December 28, 2024 and sell it today you would earn a total of  14.00  from holding Artisan High Income or generate 1.56% return on investment over 90 days.

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

City National Rochdale  vs.  Artisan High Income

City National Rochdale

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in City National Rochdale are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, City National is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Artisan High Income

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan High Income are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Artisan High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with City National and Artisan High

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

The idea behind City National Rochdale and Artisan High Income 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.