Correlation Between Janus Global and Dunham Large

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

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

Diversification Opportunities for Janus Global and Dunham Large

0.67

Correlation Coefficient

Janus Global  Dunham Large

Poor diversification

The 3 months correlation between Janus and Dunham is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Janus Global Technology and Dunham Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Large Cap and Janus Global 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 Global Technology are associated (or correlated) with Dunham Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Large Cap has no effect on the direction of Janus Global i.e., Janus Global and Dunham Large go up and down completely randomly.

Pair Corralation between Janus Global and Dunham Large

Assuming the 90 days horizon Janus Global Technology is expected to generate 1.67 times more return on investment than Dunham Large. However, Janus Global is 1.67 times more volatile than Dunham Large Cap. It trades about 0.08 of its potential returns per unit of risk. Dunham Large Cap is currently generating about 0.04 per unit of risk. If you would invest  3,624  in Janus Global Technology on October 4, 2024 and sell it today you would earn a total of  2,533  from holding Janus Global Technology or generate 69.9% return on investment over 90 days.

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

Janus Global Technology  vs.  Dunham Large Cap

Janus Global Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Janus Global Technology has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Dunham Large Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dunham Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Janus Global and Dunham Large

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

The idea behind Janus Global Technology and Dunham Large Cap 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 Global Correlations module to find global opportunities by holding instruments from different markets.