Correlation Between WW Grainger and Artemis Strategic

Can any of the company-specific risk be diversified away by investing in both WW Grainger and Artemis Strategic 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 WW Grainger and Artemis Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between WW Grainger and Artemis Strategic Investment, you can compare the effects of market volatilities on WW Grainger and Artemis Strategic 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 WW Grainger with a short position of Artemis Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of WW Grainger and Artemis Strategic.

Diversification Opportunities for WW Grainger and Artemis Strategic

0.42

Correlation Coefficient

WW Grainger  Artemis Strategic

Very weak diversification

The 3 months correlation between GWW and Artemis is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding WW Grainger and Artemis Strategic Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artemis Strategic and WW Grainger 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 WW Grainger are associated (or correlated) with Artemis Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artemis Strategic has no effect on the direction of WW Grainger i.e., WW Grainger and Artemis Strategic go up and down completely randomly.

Pair Corralation between WW Grainger and Artemis Strategic

Considering the 90-day investment horizon WW Grainger is expected to generate 10.27 times more return on investment than Artemis Strategic. However, WW Grainger is 10.27 times more volatile than Artemis Strategic Investment. It trades about 0.2 of its potential returns per unit of risk. Artemis Strategic Investment is currently generating about 0.39 per unit of risk. If you would invest  68,335  in WW Grainger on January 19, 2024 and sell it today you would earn a total of  25,419  from holding WW Grainger or generate 37.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	12.2%
Values	Daily Returns

WW Grainger  vs.  Artemis Strategic Investment

WW Grainger

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in WW Grainger are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, WW Grainger may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Artemis Strategic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Artemis Strategic Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Artemis Strategic is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with WW Grainger and Artemis Strategic

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

The idea behind WW Grainger and Artemis Strategic Investment 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.