Correlation Between IShares Basic and Janus Henderson

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

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

Diversification Opportunities for IShares Basic and Janus Henderson

-0.53

Correlation Coefficient

IShares Basic  Janus Henderson

Excellent diversification

The 3 months correlation between IShares and Janus is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding iShares Basic Materials and Janus Henderson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Henderson and IShares Basic 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 iShares Basic Materials 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 IShares Basic i.e., IShares Basic and Janus Henderson go up and down completely randomly.

Pair Corralation between IShares Basic and Janus Henderson

If you would invest  2,385  in Janus Henderson on October 12, 2024 and sell it today you would earn a total of  0.00  from holding Janus Henderson or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	5.0%
Values	Daily Returns

iShares Basic Materials  vs.  Janus Henderson

iShares Basic Materials

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Basic Materials has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of sluggish performance in the last few months, the Etf's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the ETF 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 very healthy basic indicators, Janus Henderson is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with IShares Basic and Janus Henderson

The main advantage of trading using opposite IShares Basic and Janus Henderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Basic 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 iShares Basic Materials 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.