Correlation Between Janus Henderson and Brown Capital

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

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

Diversification Opportunities for Janus Henderson and Brown Capital

-0.2

Correlation Coefficient

Janus Henderson  Brown Capital

Good diversification

The 3 months correlation between Janus and Brown is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Janus Henderson Global and The Brown Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brown Capital and Janus Henderson 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 Janus Henderson Global are associated (or correlated) with Brown Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brown Capital has no effect on the direction of Janus Henderson i.e., Janus Henderson and Brown Capital go up and down completely randomly.

Pair Corralation between Janus Henderson and Brown Capital

Assuming the 90 days horizon Janus Henderson Global is expected to generate 0.51 times more return on investment than Brown Capital. However, Janus Henderson Global is 1.96 times less risky than Brown Capital. It trades about 0.26 of its potential returns per unit of risk. The Brown Capital is currently generating about -0.04 per unit of risk. If you would invest  600.00  in Janus Henderson Global on December 28, 2024 and sell it today you would earn a total of  56.00  from holding Janus Henderson Global or generate 9.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Janus Henderson Global  vs.  The Brown Capital

Janus Henderson Global

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Henderson Global are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Janus Henderson may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Brown Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Brown Capital has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Brown Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Janus Henderson and Brown Capital

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

The idea behind Janus Henderson Global and The Brown Capital 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.