Correlation Between Dimensional Australia and Janus Henderson

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

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

Diversification Opportunities for Dimensional Australia and Janus Henderson

-0.08

Correlation Coefficient

Dimensional Australia  Janus Henderson

Good diversification

The 3 months correlation between Dimensional and Janus is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Dimensional Australia Core 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 Dimensional Australia 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 Dimensional Australia Core 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 Dimensional Australia i.e., Dimensional Australia and Janus Henderson go up and down completely randomly.

Pair Corralation between Dimensional Australia and Janus Henderson

Assuming the 90 days trading horizon Dimensional Australia Core is expected to under-perform the Janus Henderson. In addition to that, Dimensional Australia is 3.55 times more volatile than Janus Henderson Sustainable. It trades about -0.01 of its total potential returns per unit of risk. Janus Henderson Sustainable is currently generating about 0.16 per unit of volatility. If you would invest  4,972  in Janus Henderson Sustainable on December 24, 2024 and sell it today you would earn a total of  96.00  from holding Janus Henderson Sustainable or generate 1.93% return on investment over 90 days.

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

Dimensional Australia Core  vs.  Janus Henderson Sustainable

Dimensional Australia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dimensional Australia Core has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Dimensional Australia is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Janus Henderson Sust

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Henderson Sustainable are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Janus Henderson is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Dimensional Australia and Janus Henderson

The main advantage of trading using opposite Dimensional Australia and Janus Henderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimensional Australia 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 Dimensional Australia Core 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.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..