Correlation Between Janus Flexible and Flexible Bond

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

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

Diversification Opportunities for Janus Flexible and Flexible Bond

0.99

Correlation Coefficient

Janus Flexible  Flexible Bond

No risk reduction

The 3 months correlation between Janus and Flexible is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Janus Flexible Bond and Flexible Bond Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flexible Bond Portfolio and Janus Flexible 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 Flexible Bond are associated (or correlated) with Flexible Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flexible Bond Portfolio has no effect on the direction of Janus Flexible i.e., Janus Flexible and Flexible Bond go up and down completely randomly.

Pair Corralation between Janus Flexible and Flexible Bond

Assuming the 90 days horizon Janus Flexible is expected to generate 1.61 times less return on investment than Flexible Bond. But when comparing it to its historical volatility, Janus Flexible Bond is 1.01 times less risky than Flexible Bond. It trades about 0.02 of its potential returns per unit of risk. Flexible Bond Portfolio is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  991.00  in Flexible Bond Portfolio on November 28, 2024 and sell it today you would earn a total of  7.00  from holding Flexible Bond Portfolio or generate 0.71% return on investment over 90 days.

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

Janus Flexible Bond  vs.  Flexible Bond Portfolio

Janus Flexible Bond

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Flexible Bond are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Janus Flexible is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Flexible Bond Portfolio

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Flexible Bond Portfolio are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Flexible Bond 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 Flexible and Flexible Bond

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

The idea behind Janus Flexible Bond and Flexible Bond Portfolio 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.