Correlation Between Artisan High and Small Cap
Can any of the company-specific risk be diversified away by investing in both Artisan High and Small Cap 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 Artisan High and Small Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Artisan High Income and Small Cap Core, you can compare the effects of market volatilities on Artisan High and Small Cap 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 Artisan High with a short position of Small Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan High and Small Cap.
Diversification Opportunities for Artisan High and Small Cap
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Artisan and Small is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Artisan High Income and Small Cap Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Core and Artisan High 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 Artisan High Income are associated (or correlated) with Small Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Core has no effect on the direction of Artisan High i.e., Artisan High and Small Cap go up and down completely randomly.
Pair Corralation between Artisan High and Small Cap
Assuming the 90 days horizon Artisan High is expected to generate 3.61 times less return on investment than Small Cap. But when comparing it to its historical volatility, Artisan High Income is 5.77 times less risky than Small Cap. It trades about 0.42 of its potential returns per unit of risk. Small Cap Core is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 994.00 in Small Cap Core on April 20, 2025 and sell it today you would earn a total of 202.00 from holding Small Cap Core or generate 20.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Artisan High Income vs. Small Cap Core
Performance |
| Timeline |
| Artisan High Income |
| Small Cap Core |
Artisan High and Small Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artisan High and Small Cap
The main advantage of trading using opposite Artisan High and Small Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan High position performs unexpectedly, Small Cap 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 Small Cap will offset losses from the drop in Small Cap's long position.| Artisan High vs. Artisan Value Income | Artisan High vs. Artisan Developing World | Artisan High vs. Artisan Thematic Fund | Artisan High vs. Artisan Small Cap |
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Check out your portfolio center.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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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