Correlation Between Janus International and Latham

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

Diversification Opportunities for Janus International and Latham

0.12

Correlation Coefficient

Janus International  Latham

Average diversification

The 3 months correlation between Janus and Latham is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Janus International Group and Latham Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Latham Group 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 Latham. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Latham Group has no effect on the direction of Janus International i.e., Janus International and Latham go up and down completely randomly.

Pair Corralation between Janus International and Latham

Considering the 90-day investment horizon Janus International is expected to generate 1.71 times less return on investment than Latham. But when comparing it to its historical volatility, Janus International Group is 1.8 times less risky than Latham. It trades about 0.02 of its potential returns per unit of risk. Latham Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  700.00  in Latham Group on December 27, 2024 and sell it today you would lose (1.00) from holding Latham Group or give up 0.14% of portfolio value over 90 days.

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

Janus International Group  vs.  Latham Group

Janus International

Risk-Adjusted Performance

Insignificant

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.

Latham Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Latham Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent forward indicators, Latham may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Janus International and Latham

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

The idea behind Janus International Group and Latham Group 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.