Correlation Between The Hartford and Janus Enterprise

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

0.91

Correlation Coefficient

The Hartford  Janus Enterprise

Almost no diversification

The 3 months correlation between The and Janus is 0.91. 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 0.9 times more return on investment than Janus Enterprise. However, The Hartford Midcap is 1.11 times less risky than Janus Enterprise. It trades about 0.22 of its potential returns per unit of risk. Janus Enterprise Fund is currently generating about 0.06 per unit of risk. If you would invest  2,613  in The Hartford Midcap on September 9, 2024 and sell it today you would earn a total of  506.00  from holding The Hartford Midcap or generate 19.36% return on investment over 90 days.

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

The Hartford Midcap  vs.  Janus Enterprise Fund

Hartford Midcap

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Midcap are ranked lower than 21 (%) 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

2 of 100

Weak

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

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.

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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.