Correlation Between Janus Forty and Janus Global

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

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

Diversification Opportunities for Janus Forty and Janus Global

-0.52

Correlation Coefficient

Janus Forty  Janus Global

Excellent diversification

The 3 months correlation between Janus and Janus is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Janus Forty Fund and Janus Global Unconstrained in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Global Unconst and Janus Forty 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 Forty Fund are associated (or correlated) with Janus Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Global Unconst has no effect on the direction of Janus Forty i.e., Janus Forty and Janus Global go up and down completely randomly.

Pair Corralation between Janus Forty and Janus Global

Assuming the 90 days horizon Janus Forty Fund is expected to under-perform the Janus Global. In addition to that, Janus Forty is 10.95 times more volatile than Janus Global Unconstrained. It trades about -0.07 of its total potential returns per unit of risk. Janus Global Unconstrained is currently generating about 0.17 per unit of volatility. If you would invest  885.00  in Janus Global Unconstrained on December 20, 2024 and sell it today you would earn a total of  11.00  from holding Janus Global Unconstrained or generate 1.24% return on investment over 90 days.

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

Janus Forty Fund  vs.  Janus Global Unconstrained

Janus Forty Fund

Risk-Adjusted Performance

Very Weak

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

Janus Global Unconst

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Global Unconstrained are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Janus Global 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 Forty and Janus Global

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

The idea behind Janus Forty Fund and Janus Global Unconstrained 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.