Correlation Between IShares Treasury and Janus Henderson

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

By analyzing existing cross correlation between iShares Treasury Bond and Janus Henderson Mortgage Backed, you can compare the effects of market volatilities on IShares Treasury 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 IShares Treasury with a short position of Janus Henderson. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Treasury and Janus Henderson.

Diversification Opportunities for IShares Treasury and Janus Henderson

0.99

Correlation Coefficient

IShares Treasury  Janus Henderson

No risk reduction

The 3 months correlation between IShares and Janus is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding iShares Treasury Bond and Janus Henderson Mortgage Backe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Henderson Mort and IShares Treasury 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 iShares Treasury Bond 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 Mort has no effect on the direction of IShares Treasury i.e., IShares Treasury and Janus Henderson go up and down completely randomly.

Pair Corralation between IShares Treasury and Janus Henderson

Given the investment horizon of 90 days iShares Treasury Bond is expected to under-perform the Janus Henderson. But the etf apears to be less risky and, when comparing its historical volatility, iShares Treasury Bond is 1.17 times less risky than Janus Henderson. The etf trades about -0.11 of its potential returns per unit of risk. The Janus Henderson Mortgage Backed is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  4,611  in Janus Henderson Mortgage Backed on September 12, 2024 and sell it today you would lose (91.00) from holding Janus Henderson Mortgage Backed or give up 1.97% of portfolio value over 90 days.

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

iShares Treasury Bond  vs.  Janus Henderson Mortgage Backe

iShares Treasury Bond

Risk-Adjusted Performance

0 of 100

Very Weak

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

Janus Henderson Mort

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Janus Henderson Mortgage Backed has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental drivers, Janus Henderson is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with IShares Treasury and Janus Henderson

The main advantage of trading using opposite IShares Treasury and Janus Henderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Treasury 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 iShares Treasury Bond and Janus Henderson Mortgage Backed 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.