Correlation Between Blackrock High and Janus Henderson

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

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

Diversification Opportunities for Blackrock High and Janus Henderson

0.96

Correlation Coefficient

Blackrock High  Janus Henderson

Almost no diversification

The 3 months correlation between Blackrock and Janus is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock High Yield and Janus Henderson High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Henderson High and Blackrock 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 Blackrock High Yield 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 High has no effect on the direction of Blackrock High i.e., Blackrock High and Janus Henderson go up and down completely randomly.

Pair Corralation between Blackrock High and Janus Henderson

Assuming the 90 days horizon Blackrock High Yield is expected to under-perform the Janus Henderson. In addition to that, Blackrock High is 1.08 times more volatile than Janus Henderson High Yield. It trades about -0.05 of its total potential returns per unit of risk. Janus Henderson High Yield is currently generating about -0.01 per unit of volatility. If you would invest  735.00  in Janus Henderson High Yield on October 5, 2024 and sell it today you would lose (1.00) from holding Janus Henderson High Yield or give up 0.14% of portfolio value over 90 days.

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

Blackrock High Yield  vs.  Janus Henderson High Yield

Blackrock High Yield

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock High Yield has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Blackrock High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Janus Henderson High

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Janus Henderson High Yield has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Janus Henderson is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Blackrock High and Janus Henderson

The main advantage of trading using opposite Blackrock High and Janus Henderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock High 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 Blackrock High Yield and Janus Henderson High Yield 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.