Correlation Between Champlain Small and Janus Triton

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

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

Diversification Opportunities for Champlain Small and Janus Triton

0.92

Correlation Coefficient

Champlain Small  Janus Triton

Almost no diversification

The 3 months correlation between Champlain and Janus is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Small and Janus Triton Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Triton and Champlain Small 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 Champlain Small are associated (or correlated) with Janus Triton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Triton has no effect on the direction of Champlain Small i.e., Champlain Small and Janus Triton go up and down completely randomly.

Pair Corralation between Champlain Small and Janus Triton

Assuming the 90 days horizon Champlain Small is expected to generate 1.34 times more return on investment than Janus Triton. However, Champlain Small is 1.34 times more volatile than Janus Triton Fund. It trades about 0.17 of its potential returns per unit of risk. Janus Triton Fund is currently generating about 0.17 per unit of risk. If you would invest  2,255  in Champlain Small on September 2, 2024 and sell it today you would earn a total of  297.00  from holding Champlain Small or generate 13.17% return on investment over 90 days.

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

Champlain Small  vs.  Janus Triton Fund

Champlain Small

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Champlain Small are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Champlain Small showed solid returns over the last few months and may actually be approaching a breakup point.

Janus Triton

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Triton Fund are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Janus Triton may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Champlain Small and Janus Triton

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

The idea behind Champlain Small and Janus Triton Fund 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.