Correlation Between The Hartford and Janus Venture

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Can any of the company-specific risk be diversified away by investing in both The Hartford 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 The Hartford and Janus Venture 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 Venture Fund, you can compare the effects of market volatilities on The Hartford 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 The Hartford with a short position of Janus Venture. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Janus Venture.

Diversification Opportunities for The Hartford and Janus Venture

0.87
  Correlation Coefficient

Very poor diversification

The 3 months correlation between The and Janus is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Midcap and Janus Venture Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Venture 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 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 The Hartford i.e., The Hartford and Janus Venture go up and down completely randomly.

Pair Corralation between The Hartford and Janus Venture

Assuming the 90 days horizon The Hartford Midcap is expected to generate 0.69 times more return on investment than Janus Venture. However, The Hartford Midcap is 1.45 times less risky than Janus Venture. It trades about 0.28 of its potential returns per unit of risk. Janus Venture Fund is currently generating about 0.06 per unit of risk. If you would invest  3,160  in The Hartford Midcap on September 9, 2024 and sell it today you would earn a total of  520.00  from holding The Hartford Midcap or generate 16.46% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

The Hartford Midcap  vs.  Janus Venture Fund

 Performance 
       Timeline  
Hartford Midcap 

Risk-Adjusted Performance

21 of 100

 
Weak
 
Strong
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 basic indicators, The Hartford showed solid returns over the last few months and may actually be approaching a breakup point.
Janus Venture 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Janus Venture Fund are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Janus Venture is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

The Hartford and Janus Venture Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with The Hartford and Janus Venture

The main advantage of trading using opposite The Hartford and Janus Venture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford 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 The Hartford Midcap 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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