Correlation Between Janus Forty and Conestoga Small
Can any of the company-specific risk be diversified away by investing in both Janus Forty and Conestoga Small 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 Forty and Conestoga Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Janus Forty Fund and Conestoga Small Cap, you can compare the effects of market volatilities on Janus Forty and Conestoga Small 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 Forty with a short position of Conestoga Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janus Forty and Conestoga Small.
Diversification Opportunities for Janus Forty and Conestoga Small
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Janus and Conestoga is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Janus Forty Fund and Conestoga Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conestoga Small Cap and Janus Forty 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 Forty Fund are associated (or correlated) with Conestoga Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conestoga Small Cap has no effect on the direction of Janus Forty i.e., Janus Forty and Conestoga Small go up and down completely randomly.
Pair Corralation between Janus Forty and Conestoga Small
Assuming the 90 days horizon Janus Forty Fund is expected to generate 1.21 times more return on investment than Conestoga Small. However, Janus Forty is 1.21 times more volatile than Conestoga Small Cap. It trades about -0.1 of its potential returns per unit of risk. Conestoga Small Cap is currently generating about -0.17 per unit of risk. If you would invest 5,770 in Janus Forty Fund on December 29, 2024 and sell it today you would lose (504.00) from holding Janus Forty Fund or give up 8.73% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Janus Forty Fund vs. Conestoga Small Cap
Performance |
Timeline |
Janus Forty Fund |
Conestoga Small Cap |
Janus Forty and Conestoga Small Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Janus Forty and Conestoga Small
The main advantage of trading using opposite Janus Forty and Conestoga Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Janus Forty position performs unexpectedly, Conestoga Small 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 Conestoga Small will offset losses from the drop in Conestoga Small's long position.Janus Forty vs. Janus Forty Fund | Janus Forty vs. Janus Forty Fund | Janus Forty vs. Janus Forty Fund | Janus Forty vs. Janus Forty Fund |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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