Correlation Between First Trust and Pfg Janus

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

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

Diversification Opportunities for First Trust and Pfg Janus

0.82

Correlation Coefficient

First Trust  Pfg Janus

Very poor diversification

The 3 months correlation between First and Pfg is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Short and Pfg Janus Henderson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfg Janus Henderson and First Trust 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 First Trust Short are associated (or correlated) with Pfg Janus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pfg Janus Henderson has no effect on the direction of First Trust i.e., First Trust and Pfg Janus go up and down completely randomly.

Pair Corralation between First Trust and Pfg Janus

Assuming the 90 days horizon First Trust Short is expected to generate 0.18 times more return on investment than Pfg Janus. However, First Trust Short is 5.46 times less risky than Pfg Janus. It trades about -0.17 of its potential returns per unit of risk. Pfg Janus Henderson is currently generating about -0.06 per unit of risk. If you would invest  1,809  in First Trust Short on September 22, 2024 and sell it today you would lose (7.00) from holding First Trust Short or give up 0.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.45%
Values	Daily Returns

First Trust Short  vs.  Pfg Janus Henderson

First Trust Short

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in First Trust Short are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, First Trust is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pfg Janus Henderson

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pfg Janus Henderson are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical indicators, Pfg Janus is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with First Trust and Pfg Janus

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

The idea behind First Trust Short and Pfg Janus Henderson 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.