Correlation Between Janus Short-term and Thompson Bond

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

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

Diversification Opportunities for Janus Short-term and Thompson Bond

0.88

Correlation Coefficient

Janus Short-term  Thompson Bond

Very poor diversification

The 3 months correlation between Janus and Thompson is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Janus Short Term Bond and Thompson Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thompson Bond and Janus Short-term 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 Short Term Bond are associated (or correlated) with Thompson Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thompson Bond has no effect on the direction of Janus Short-term i.e., Janus Short-term and Thompson Bond go up and down completely randomly.

Pair Corralation between Janus Short-term and Thompson Bond

Assuming the 90 days horizon Janus Short-term is expected to generate 2.19 times less return on investment than Thompson Bond. In addition to that, Janus Short-term is 1.28 times more volatile than Thompson Bond Fund. It trades about 0.12 of its total potential returns per unit of risk. Thompson Bond Fund is currently generating about 0.32 per unit of volatility. If you would invest  1,037  in Thompson Bond Fund on December 2, 2024 and sell it today you would earn a total of  24.00  from holding Thompson Bond Fund or generate 2.31% return on investment over 90 days.

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

Janus Short Term Bond  vs.  Thompson Bond Fund

Janus Short Term

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Short Term Bond are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Janus Short-term is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Thompson Bond

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Thompson Bond Fund are ranked lower than 25 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Thompson 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 Short-term and Thompson Bond

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

The idea behind Janus Short Term Bond and Thompson Bond 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.

Check out your portfolio center.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.