Correlation Between Janus Global and Fidelity International

Can any of the company-specific risk be diversified away by investing in both Janus Global and Fidelity International 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 Fidelity International 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 Fidelity International Discovery, you can compare the effects of market volatilities on Janus Global and Fidelity International 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 Fidelity International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janus Global and Fidelity International.

Diversification Opportunities for Janus Global and Fidelity International

-0.26

Correlation Coefficient

Janus Global  Fidelity International

Very good diversification

The 3 months correlation between Janus and Fidelity is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Janus Global Technology and Fidelity International Discove in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity International 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 Fidelity International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity International has no effect on the direction of Janus Global i.e., Janus Global and Fidelity International go up and down completely randomly.

Pair Corralation between Janus Global and Fidelity International

Assuming the 90 days horizon Janus Global Technology is expected to generate 1.87 times more return on investment than Fidelity International. However, Janus Global is 1.87 times more volatile than Fidelity International Discovery. It trades about -0.01 of its potential returns per unit of risk. Fidelity International Discovery is currently generating about -0.07 per unit of risk. If you would invest  6,436  in Janus Global Technology on September 15, 2024 and sell it today you would lose (116.00) from holding Janus Global Technology or give up 1.8% of portfolio value over 90 days.

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

Janus Global Technology  vs.  Fidelity International Discove

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 fairly strong basic indicators, Janus Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity International Discovery has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Fidelity International 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 Global and Fidelity International

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

The idea behind Janus Global Technology and Fidelity International Discovery 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.