Correlation Between Glg Intl and Janus Global

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

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

Diversification Opportunities for Glg Intl and Janus Global

-0.25

Correlation Coefficient

Glg Intl  Janus Global

Very good diversification

The 3 months correlation between Glg and Janus is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Glg Intl Small and Janus Global Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Global Technology and Glg Intl 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 Glg Intl Small are associated (or correlated) with Janus Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Global Technology has no effect on the direction of Glg Intl i.e., Glg Intl and Janus Global go up and down completely randomly.

Pair Corralation between Glg Intl and Janus Global

Assuming the 90 days horizon Glg Intl Small is expected to under-perform the Janus Global. But the mutual fund apears to be less risky and, when comparing its historical volatility, Glg Intl Small is 1.16 times less risky than Janus Global. The mutual fund trades about -0.13 of its potential returns per unit of risk. The Janus Global Technology is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  6,453  in Janus Global Technology on October 10, 2024 and sell it today you would lose (136.00) from holding Janus Global Technology or give up 2.11% of portfolio value over 90 days.

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

Glg Intl Small  vs.  Janus Global Technology

Glg Intl Small

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Glg Intl Small are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Glg Intl is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Janus Global Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Janus Global Technology has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Glg Intl and Janus Global

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

The idea behind Glg Intl Small and Janus Global Technology 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.