Correlation Between Global X and Janus Henderson

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

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

Diversification Opportunities for Global X and Janus Henderson

-0.12

Correlation Coefficient

Global X  Janus Henderson

Good diversification

The 3 months correlation between Global and Janus is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Global X Alternative and Janus Henderson SmallMid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Henderson SmallMid and Global X 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 Global X Alternative 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 SmallMid has no effect on the direction of Global X i.e., Global X and Janus Henderson go up and down completely randomly.

Pair Corralation between Global X and Janus Henderson

Given the investment horizon of 90 days Global X Alternative is expected to generate 0.49 times more return on investment than Janus Henderson. However, Global X Alternative is 2.04 times less risky than Janus Henderson. It trades about 0.13 of its potential returns per unit of risk. Janus Henderson SmallMid is currently generating about -0.08 per unit of risk. If you would invest  1,134  in Global X Alternative on December 19, 2024 and sell it today you would earn a total of  47.00  from holding Global X Alternative or generate 4.14% return on investment over 90 days.

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

Global X Alternative  vs.  Janus Henderson SmallMid

Global X Alternative

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Alternative are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Global X is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Janus Henderson SmallMid

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Global X and Janus Henderson

The main advantage of trading using opposite Global X and Janus Henderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X 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 Global X Alternative and Janus Henderson SmallMid 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.