Correlation Between Janus Growth and Janus Global

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

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

Diversification Opportunities for Janus Growth and Janus Global

0.45

Correlation Coefficient

Janus Growth  Janus Global

Very weak diversification

The 3 months correlation between Janus and Janus is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Janus Growth And and Janus Global Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Global Allocation and Janus Growth 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 Growth And are associated (or correlated) with Janus Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Global Allocation has no effect on the direction of Janus Growth i.e., Janus Growth and Janus Global go up and down completely randomly.

Pair Corralation between Janus Growth and Janus Global

Assuming the 90 days horizon Janus Growth And is expected to generate 0.82 times more return on investment than Janus Global. However, Janus Growth And is 1.22 times less risky than Janus Global. It trades about -0.05 of its potential returns per unit of risk. Janus Global Allocation is currently generating about -0.07 per unit of risk. If you would invest  6,876  in Janus Growth And on December 19, 2024 and sell it today you would lose (231.00) from holding Janus Growth And or give up 3.36% of portfolio value over 90 days.

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

Janus Growth And  vs.  Janus Global Allocation

Janus Growth And

Risk-Adjusted Performance

Very Weak

Over the last 90 days Janus Growth And has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Janus Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Janus Global Allocation

Risk-Adjusted Performance

Very Weak

Over the last 90 days Janus Global Allocation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Janus Global 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 Growth and Janus Global

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

The idea behind Janus Growth And and Janus Global Allocation 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.