Correlation Between Janus Detroit and IShares IBoxx

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

By analyzing existing cross correlation between Janus Detroit Street and iShares iBoxx Investment, you can compare the effects of market volatilities on Janus Detroit and IShares IBoxx 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 Detroit with a short position of IShares IBoxx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janus Detroit and IShares IBoxx.

Diversification Opportunities for Janus Detroit and IShares IBoxx

0.88

Correlation Coefficient

Janus Detroit  IShares IBoxx

Very poor diversification

The 3 months correlation between Janus and IShares is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Janus Detroit Street and iShares iBoxx Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares iBoxx Investment and Janus Detroit 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 Detroit Street are associated (or correlated) with IShares IBoxx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares iBoxx Investment has no effect on the direction of Janus Detroit i.e., Janus Detroit and IShares IBoxx go up and down completely randomly.

Pair Corralation between Janus Detroit and IShares IBoxx

Given the investment horizon of 90 days Janus Detroit Street is expected to generate 1.06 times more return on investment than IShares IBoxx. However, Janus Detroit is 1.06 times more volatile than iShares iBoxx Investment. It trades about 0.12 of its potential returns per unit of risk. iShares iBoxx Investment is currently generating about 0.06 per unit of risk. If you would invest  4,938  in Janus Detroit Street on December 28, 2024 and sell it today you would earn a total of  144.32  from holding Janus Detroit Street or generate 2.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.33%
Values	Daily Returns

Janus Detroit Street  vs.  iShares iBoxx Investment

Janus Detroit Street

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Detroit Street are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong primary indicators, Janus Detroit is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

iShares iBoxx Investment

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in iShares iBoxx Investment are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, IShares IBoxx is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Janus Detroit and IShares IBoxx

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

The idea behind Janus Detroit Street and iShares iBoxx Investment 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.