Correlation Between The Hartford and Janus Enterprise

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Can any of the company-specific risk be diversified away by investing in both The Hartford and Janus Enterprise 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 The Hartford and Janus Enterprise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hartford Midcap and Janus Enterprise Fund, you can compare the effects of market volatilities on The Hartford and Janus Enterprise 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 The Hartford with a short position of Janus Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Janus Enterprise.

Diversification Opportunities for The Hartford and Janus Enterprise

0.99
  Correlation Coefficient

No risk reduction

The 3 months correlation between The and Janus is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Midcap and Janus Enterprise Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Enterprise and The Hartford 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 The Hartford Midcap are associated (or correlated) with Janus Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Enterprise has no effect on the direction of The Hartford i.e., The Hartford and Janus Enterprise go up and down completely randomly.

Pair Corralation between The Hartford and Janus Enterprise

Assuming the 90 days horizon The Hartford Midcap is expected to generate 1.25 times more return on investment than Janus Enterprise. However, The Hartford is 1.25 times more volatile than Janus Enterprise Fund. It trades about 0.12 of its potential returns per unit of risk. Janus Enterprise Fund is currently generating about 0.14 per unit of risk. If you would invest  2,692  in The Hartford Midcap on September 6, 2024 and sell it today you would earn a total of  432.00  from holding The Hartford Midcap or generate 16.05% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

The Hartford Midcap  vs.  Janus Enterprise Fund

 Performance 
       Timeline  
Hartford Midcap 

Risk-Adjusted Performance

24 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Midcap are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, The Hartford showed solid returns over the last few months and may actually be approaching a breakup point.
Janus Enterprise 

Risk-Adjusted Performance

18 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Janus Enterprise Fund are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Janus Enterprise may actually be approaching a critical reversion point that can send shares even higher in January 2025.

The Hartford and Janus Enterprise Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with The Hartford and Janus Enterprise

The main advantage of trading using opposite The Hartford and Janus Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, Janus Enterprise 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 Enterprise will offset losses from the drop in Janus Enterprise's long position.
The idea behind The Hartford Midcap and Janus Enterprise 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.

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