Correlation Between Federated International and Janus Venture

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

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

Diversification Opportunities for Federated International and Janus Venture

0.19

Correlation Coefficient

Federated International  Janus Venture

Average diversification

The 3 months correlation between Federated and Janus is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Federated International Leader and Janus Venture Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Venture and Federated International 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 Federated International Leaders are associated (or correlated) with Janus Venture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Venture has no effect on the direction of Federated International i.e., Federated International and Janus Venture go up and down completely randomly.

Pair Corralation between Federated International and Janus Venture

Assuming the 90 days horizon Federated International Leaders is expected to generate 0.79 times more return on investment than Janus Venture. However, Federated International Leaders is 1.26 times less risky than Janus Venture. It trades about 0.39 of its potential returns per unit of risk. Janus Venture Fund is currently generating about -0.28 per unit of risk. If you would invest  3,680  in Federated International Leaders on December 5, 2024 and sell it today you would earn a total of  257.00  from holding Federated International Leaders or generate 6.98% return on investment over 90 days.

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

Federated International Leader  vs.  Janus Venture Fund

Federated International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Federated International Leaders are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Federated International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Janus Venture

Risk-Adjusted Performance

Very Weak

Over the last 90 days Janus Venture Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Federated International and Janus Venture

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

The idea behind Federated International Leaders and Janus Venture 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.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.