Correlation Between Invesco SP and Janus Henderson

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

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

Diversification Opportunities for Invesco SP and Janus Henderson

-0.33

Correlation Coefficient

Invesco SP  Janus Henderson

Very good diversification

The 3 months correlation between Invesco and Janus is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Invesco SP International and Janus Henderson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Henderson and Invesco SP 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 Invesco SP International 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 has no effect on the direction of Invesco SP i.e., Invesco SP and Janus Henderson go up and down completely randomly.

Pair Corralation between Invesco SP and Janus Henderson

Given the investment horizon of 90 days Invesco SP International is expected to generate 0.87 times more return on investment than Janus Henderson. However, Invesco SP International is 1.15 times less risky than Janus Henderson. It trades about 0.05 of its potential returns per unit of risk. Janus Henderson is currently generating about 0.03 per unit of risk. If you would invest  2,497  in Invesco SP International on October 26, 2024 and sell it today you would earn a total of  490.00  from holding Invesco SP International or generate 19.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	86.03%
Values	Daily Returns

Invesco SP International  vs.  Janus Henderson

Invesco SP International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco SP International has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical indicators, Invesco SP is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Janus Henderson

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Invesco SP and Janus Henderson

The main advantage of trading using opposite Invesco SP and Janus Henderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco SP 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 Invesco SP International and Janus Henderson 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.