Correlation Between Thornburg Limited and Artisan Global

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

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

Diversification Opportunities for Thornburg Limited and Artisan Global

0.5

Correlation Coefficient

Thornburg Limited  Artisan Global

Very weak diversification

The 3 months correlation between Thornburg and Artisan is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg Limited Term and Artisan Global Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Global Oppor and Thornburg Limited 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 Thornburg Limited Term 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 Oppor has no effect on the direction of Thornburg Limited i.e., Thornburg Limited and Artisan Global go up and down completely randomly.

Pair Corralation between Thornburg Limited and Artisan Global

Assuming the 90 days horizon Thornburg Limited Term is expected to generate 0.17 times more return on investment than Artisan Global. However, Thornburg Limited Term is 5.94 times less risky than Artisan Global. It trades about -0.35 of its potential returns per unit of risk. Artisan Global Opportunities is currently generating about -0.19 per unit of risk. If you would invest  1,297  in Thornburg Limited Term on October 12, 2024 and sell it today you would lose (13.00) from holding Thornburg Limited Term or give up 1.0% of portfolio value over 90 days.

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

Thornburg Limited Term  vs.  Artisan Global Opportunities

Thornburg Limited Term

Risk-Adjusted Performance

0 of 100

Very Weak

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

Artisan Global Oppor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Artisan Global Opportunities has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Thornburg Limited and Artisan Global

The main advantage of trading using opposite Thornburg Limited and Artisan Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thornburg Limited 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 Thornburg Limited Term and Artisan Global Opportunities 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.