Correlation Between Janus Henderson and Eventide Healthcare

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

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

Diversification Opportunities for Janus Henderson and Eventide Healthcare

0.82

Correlation Coefficient

Janus Henderson  Eventide Healthcare

Very poor diversification

The 3 months correlation between Janus and Eventide is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Janus Henderson Global and Eventide Healthcare Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eventide Healthcare Life and Janus Henderson 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 Henderson Global are associated (or correlated) with Eventide Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eventide Healthcare Life has no effect on the direction of Janus Henderson i.e., Janus Henderson and Eventide Healthcare go up and down completely randomly.

Pair Corralation between Janus Henderson and Eventide Healthcare

Assuming the 90 days horizon Janus Henderson Global is expected to generate 0.47 times more return on investment than Eventide Healthcare. However, Janus Henderson Global is 2.14 times less risky than Eventide Healthcare. It trades about -0.24 of its potential returns per unit of risk. Eventide Healthcare Life is currently generating about -0.16 per unit of risk. If you would invest  1,609  in Janus Henderson Global on October 8, 2024 and sell it today you would lose (56.00) from holding Janus Henderson Global or give up 3.48% of portfolio value over 90 days.

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

Janus Henderson Global  vs.  Eventide Healthcare Life

Janus Henderson Global

Risk-Adjusted Performance

0 of 100

Very Weak

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

Eventide Healthcare Life

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eventide Healthcare Life has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical indicators, Eventide Healthcare 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 Henderson and Eventide Healthcare

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

The idea behind Janus Henderson Global and Eventide Healthcare Life 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.