Correlation Between Janus Forty and Geneva Smid

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

Diversification Opportunities for Janus Forty and Geneva Smid

0.86

Correlation Coefficient

Janus Forty  Geneva Smid

Very poor diversification

The 3 months correlation between Janus and Geneva is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Janus Forty Fund and Geneva Smid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geneva Smid 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 Geneva Smid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geneva Smid Cap has no effect on the direction of Janus Forty i.e., Janus Forty and Geneva Smid go up and down completely randomly.

Pair Corralation between Janus Forty and Geneva Smid

Assuming the 90 days horizon Janus Forty is expected to generate 1.33 times less return on investment than Geneva Smid. But when comparing it to its historical volatility, Janus Forty Fund is 1.13 times less risky than Geneva Smid. It trades about 0.2 of its potential returns per unit of risk. Geneva Smid Cap is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  980.00  in Geneva Smid Cap on September 5, 2024 and sell it today you would earn a total of  152.00  from holding Geneva Smid Cap or generate 15.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Janus Forty Fund  vs.  Geneva Smid Cap

Janus Forty Fund

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Forty Fund are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Janus Forty may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Geneva Smid Cap

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Geneva Smid Cap are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Geneva Smid showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Janus Forty and Geneva Smid

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

The idea behind Janus Forty Fund and Geneva Smid Cap 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.