Correlation Between Sands Capital and Artisan Global

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

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

Diversification Opportunities for Sands Capital and Artisan Global

0.15

Correlation Coefficient

Sands Capital  Artisan Global

Average diversification

The 3 months correlation between Sands and Artisan is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Sands Capital Global and Artisan Global Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Global Value and Sands Capital 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 Sands Capital Global are associated (or correlated) with Artisan Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Global Value has no effect on the direction of Sands Capital i.e., Sands Capital and Artisan Global go up and down completely randomly.

Pair Corralation between Sands Capital and Artisan Global

Assuming the 90 days horizon Sands Capital Global is expected to generate 1.78 times more return on investment than Artisan Global. However, Sands Capital is 1.78 times more volatile than Artisan Global Value. It trades about 0.04 of its potential returns per unit of risk. Artisan Global Value is currently generating about 0.06 per unit of risk. If you would invest  2,406  in Sands Capital Global on October 15, 2024 and sell it today you would earn a total of  603.00  from holding Sands Capital Global or generate 25.06% return on investment over 90 days.

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

Sands Capital Global  vs.  Artisan Global Value

Sands Capital Global

Risk-Adjusted Performance

0 of 100

Very Weak

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

Artisan Global Value

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Artisan Global Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental 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 Sands Capital and Artisan Global

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

The idea behind Sands Capital Global and Artisan Global Value 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.