Correlation Between Janus Enterprise and Hartford Midcap

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

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

Diversification Opportunities for Janus Enterprise and Hartford Midcap

0.99

Correlation Coefficient

Janus Enterprise  Hartford Midcap

No risk reduction

The 3 months correlation between Janus and Hartford is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Janus Enterprise Fund and The Hartford Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Midcap and Janus Enterprise 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 Enterprise Fund are associated (or correlated) with Hartford Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Midcap has no effect on the direction of Janus Enterprise i.e., Janus Enterprise and Hartford Midcap go up and down completely randomly.

Pair Corralation between Janus Enterprise and Hartford Midcap

Assuming the 90 days horizon Janus Enterprise is expected to generate 1.63 times less return on investment than Hartford Midcap. But when comparing it to its historical volatility, Janus Enterprise Fund is 1.22 times less risky than Hartford Midcap. It trades about 0.18 of its potential returns per unit of risk. The Hartford Midcap is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  3,182  in The Hartford Midcap on September 5, 2024 and sell it today you would earn a total of  463.00  from holding The Hartford Midcap or generate 14.55% return on investment over 90 days.

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

Janus Enterprise Fund  vs.  The Hartford Midcap

Janus Enterprise

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Enterprise Fund are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Janus Enterprise may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Hartford Midcap

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Midcap are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Hartford Midcap showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Janus Enterprise and Hartford Midcap

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

The idea behind Janus Enterprise Fund and The Hartford Midcap 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.