Correlation Between Janus High-yield and Lazard International

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

By analyzing existing cross correlation between Janus High Yield Fund and Lazard International Equity, you can compare the effects of market volatilities on Janus High-yield and Lazard International 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 High-yield with a short position of Lazard International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janus High-yield and Lazard International.

Diversification Opportunities for Janus High-yield and Lazard International

0.61

Correlation Coefficient

Janus High-yield  Lazard International

Poor diversification

The 3 months correlation between Janus and Lazard is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Janus High Yield Fund and Lazard International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard International and Janus High-yield 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 High Yield Fund are associated (or correlated) with Lazard International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard International has no effect on the direction of Janus High-yield i.e., Janus High-yield and Lazard International go up and down completely randomly.

Pair Corralation between Janus High-yield and Lazard International

Assuming the 90 days horizon Janus High-yield is expected to generate 10.1 times less return on investment than Lazard International. But when comparing it to its historical volatility, Janus High Yield Fund is 3.36 times less risky than Lazard International. It trades about 0.09 of its potential returns per unit of risk. Lazard International Equity is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  1,577  in Lazard International Equity on December 21, 2024 and sell it today you would earn a total of  210.00  from holding Lazard International Equity or generate 13.32% return on investment over 90 days.

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

Janus High Yield Fund  vs.  Lazard International Equity

Janus High Yield

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Janus High Yield Fund are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Janus High-yield is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Lazard International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lazard International Equity are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Lazard International showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Janus High-yield and Lazard International

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

The idea behind Janus High Yield Fund and Lazard International Equity 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.