Correlation Between Cardano and Janus Henderson

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

By analyzing existing cross correlation between Cardano and Janus Henderson Sustainable, you can compare the effects of market volatilities on Cardano and Janus Henderson 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 Cardano with a short position of Janus Henderson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardano and Janus Henderson.

Diversification Opportunities for Cardano and Janus Henderson

0.71

Correlation Coefficient

Cardano  Janus Henderson

Poor diversification

The 3 months correlation between Cardano and Janus is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Cardano and Janus Henderson Sustainable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Henderson Sust and Cardano 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 Cardano are associated (or correlated) with Janus Henderson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Henderson Sust has no effect on the direction of Cardano i.e., Cardano and Janus Henderson go up and down completely randomly.

Pair Corralation between Cardano and Janus Henderson

Assuming the 90 days trading horizon Cardano is expected to generate 14.26 times more return on investment than Janus Henderson. However, Cardano is 14.26 times more volatile than Janus Henderson Sustainable. It trades about 0.08 of its potential returns per unit of risk. Janus Henderson Sustainable is currently generating about 0.05 per unit of risk. If you would invest  40.00  in Cardano on October 26, 2024 and sell it today you would earn a total of  57.00  from holding Cardano or generate 142.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	79.05%
Values	Daily Returns

Cardano  vs.  Janus Henderson Sustainable

Cardano

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cardano are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Cardano exhibited solid returns over the last few months and may actually be approaching a breakup point.

Janus Henderson Sust

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Cardano and Janus Henderson

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

The idea behind Cardano and Janus Henderson Sustainable 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.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.