Correlation Between Janus Henderson and Janus Research

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

Diversification Opportunities for Janus Henderson and Janus Research

0.15

Correlation Coefficient

Janus Henderson  Janus Research

Average diversification

The 3 months correlation between Janus and Janus is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Janus Henderson Global and Janus Research Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Research 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 Janus Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Research has no effect on the direction of Janus Henderson i.e., Janus Henderson and Janus Research go up and down completely randomly.

Pair Corralation between Janus Henderson and Janus Research

Assuming the 90 days horizon Janus Henderson Global is expected to under-perform the Janus Research. But the mutual fund apears to be less risky and, when comparing its historical volatility, Janus Henderson Global is 2.05 times less risky than Janus Research. The mutual fund trades about -0.27 of its potential returns per unit of risk. The Janus Research Fund is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  8,794  in Janus Research Fund on September 23, 2024 and sell it today you would lose (236.00) from holding Janus Research Fund or give up 2.68% of portfolio value over 90 days.

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

Janus Henderson Global  vs.  Janus Research Fund

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.

Janus Research

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Research Fund are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Janus Research 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 Janus Research

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

The idea behind Janus Henderson Global and Janus Research Fund 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.

Check out your portfolio center.

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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.