Correlation Between Janus Venture and Perkins Small

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

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

Diversification Opportunities for Janus Venture and Perkins Small

0.97

Correlation Coefficient

Janus Venture  Perkins Small

Almost no diversification

The 3 months correlation between Janus and Perkins is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Janus Venture Fund and Perkins Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perkins Small Cap and Janus Venture 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 Venture Fund are associated (or correlated) with Perkins Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perkins Small Cap has no effect on the direction of Janus Venture i.e., Janus Venture and Perkins Small go up and down completely randomly.

Pair Corralation between Janus Venture and Perkins Small

Assuming the 90 days horizon Janus Venture Fund is expected to under-perform the Perkins Small. In addition to that, Janus Venture is 1.05 times more volatile than Perkins Small Cap. It trades about -0.08 of its total potential returns per unit of risk. Perkins Small Cap is currently generating about -0.05 per unit of volatility. If you would invest  2,254  in Perkins Small Cap on December 28, 2024 and sell it today you would lose (77.00) from holding Perkins Small Cap or give up 3.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.36%
Values	Daily Returns

Janus Venture Fund  vs.  Perkins Small Cap

Janus Venture

Risk-Adjusted Performance

Very Weak

Over the last 90 days Janus Venture Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Janus Venture is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Perkins Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Perkins Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Perkins Small 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 Venture and Perkins Small

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

The idea behind Janus Venture Fund and Perkins Small 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.