Correlation Between Janus Growth and Janus Forty

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

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

Diversification Opportunities for Janus Growth and Janus Forty

0.96

Correlation Coefficient

Janus Growth  Janus Forty

Almost no diversification

The 3 months correlation between Janus and Janus is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Janus Growth And and Janus Forty Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Forty Fund and Janus Growth 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 Growth And are associated (or correlated) with Janus Forty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Forty Fund has no effect on the direction of Janus Growth i.e., Janus Growth and Janus Forty go up and down completely randomly.

Pair Corralation between Janus Growth and Janus Forty

Assuming the 90 days horizon Janus Growth is expected to generate 1.5 times less return on investment than Janus Forty. But when comparing it to its historical volatility, Janus Growth And is 1.28 times less risky than Janus Forty. It trades about 0.14 of its potential returns per unit of risk. Janus Forty Fund is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  5,778  in Janus Forty Fund on August 31, 2024 and sell it today you would earn a total of  546.00  from holding Janus Forty Fund or generate 9.45% return on investment over 90 days.

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

Janus Growth And  vs.  Janus Forty Fund

Janus Growth And

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Growth And are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Janus Growth is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Janus Forty Fund

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Forty Fund are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Janus Forty may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Janus Growth and Janus Forty

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

The idea behind Janus Growth And and Janus Forty Fund 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.