Correlation Between Janus Detroit and L3HARRIS

Can any of the company-specific risk be diversified away by investing in both Janus Detroit and L3HARRIS 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 Detroit and L3HARRIS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Janus Detroit Street and L3HARRIS TECHNOLOGIES INC, you can compare the effects of market volatilities on Janus Detroit and L3HARRIS 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 Detroit with a short position of L3HARRIS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janus Detroit and L3HARRIS.

Diversification Opportunities for Janus Detroit and L3HARRIS

0.01

Correlation Coefficient

Janus Detroit  L3HARRIS

Significant diversification

The 3 months correlation between Janus and L3HARRIS is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Janus Detroit Street and L3HARRIS TECHNOLOGIES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L3HARRIS TECHNOLOGIES INC and Janus Detroit 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 Detroit Street are associated (or correlated) with L3HARRIS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of L3HARRIS TECHNOLOGIES INC has no effect on the direction of Janus Detroit i.e., Janus Detroit and L3HARRIS go up and down completely randomly.

Pair Corralation between Janus Detroit and L3HARRIS

Given the investment horizon of 90 days Janus Detroit is expected to generate 1.44 times less return on investment than L3HARRIS. But when comparing it to its historical volatility, Janus Detroit Street is 1.36 times less risky than L3HARRIS. It trades about 0.03 of its potential returns per unit of risk. L3HARRIS TECHNOLOGIES INC is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  9,826  in L3HARRIS TECHNOLOGIES INC on December 29, 2024 and sell it today you would earn a total of  44.00  from holding L3HARRIS TECHNOLOGIES INC or generate 0.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Janus Detroit Street  vs.  L3HARRIS TECHNOLOGIES INC

Janus Detroit Street

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Detroit Street are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Janus Detroit is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

L3HARRIS TECHNOLOGIES INC

Risk-Adjusted Performance

Very Weak

Over the last 90 days L3HARRIS TECHNOLOGIES INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, L3HARRIS 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 Detroit and L3HARRIS

The main advantage of trading using opposite Janus Detroit and L3HARRIS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Janus Detroit position performs unexpectedly, L3HARRIS 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 L3HARRIS will offset losses from the drop in L3HARRIS's long position.

The idea behind Janus Detroit Street and L3HARRIS TECHNOLOGIES INC 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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.