Correlation Between Janus International and Limbach Holdings

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

By analyzing existing cross correlation between Janus International Group and Limbach Holdings, you can compare the effects of market volatilities on Janus International and Limbach Holdings 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 International with a short position of Limbach Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janus International and Limbach Holdings.

Diversification Opportunities for Janus International and Limbach Holdings

-0.28

Correlation Coefficient

Janus International  Limbach Holdings

Very good diversification

The 3 months correlation between Janus and Limbach is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Janus International Group and Limbach Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Limbach Holdings and Janus International 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 International Group are associated (or correlated) with Limbach Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Limbach Holdings has no effect on the direction of Janus International i.e., Janus International and Limbach Holdings go up and down completely randomly.

Pair Corralation between Janus International and Limbach Holdings

Considering the 90-day investment horizon Janus International Group is expected to generate 0.68 times more return on investment than Limbach Holdings. However, Janus International Group is 1.47 times less risky than Limbach Holdings. It trades about 0.02 of its potential returns per unit of risk. Limbach Holdings is currently generating about -0.01 per unit of risk. If you would invest  737.00  in Janus International Group on December 28, 2024 and sell it today you would earn a total of  13.00  from holding Janus International Group or generate 1.76% return on investment over 90 days.

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

Janus International Group  vs.  Limbach Holdings

Janus International

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Janus International Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental drivers, Janus International is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Limbach Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Limbach Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, Limbach Holdings 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 International and Limbach Holdings

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

The idea behind Janus International Group and Limbach Holdings 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.