Correlation Between Valic Company and Artisan Global

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

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

Diversification Opportunities for Valic Company and Artisan Global

0.38

Correlation Coefficient

Valic Company  Artisan Global

Weak diversification

The 3 months correlation between Valic and Artisan is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I 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 Valic Company 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 Valic Company I 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 Valic Company i.e., Valic Company and Artisan Global go up and down completely randomly.

Pair Corralation between Valic Company and Artisan Global

Assuming the 90 days horizon Valic Company I is expected to generate 0.48 times more return on investment than Artisan Global. However, Valic Company I is 2.09 times less risky than Artisan Global. It trades about -0.22 of its potential returns per unit of risk. Artisan Global Opportunities is currently generating about -0.27 per unit of risk. If you would invest  1,364  in Valic Company I on October 8, 2024 and sell it today you would lose (72.00) from holding Valic Company I or give up 5.28% of portfolio value over 90 days.

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

Valic Company I  vs.  Artisan Global Opportunities

Valic Company I

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Valic Company I are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Valic Company 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 latest weak performance, the Fund's basic 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 Valic Company and Artisan Global

The main advantage of trading using opposite Valic Company and Artisan Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company 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 Valic Company I 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.