Correlation Between Janus Triton and Conestoga Small

Can any of the company-specific risk be diversified away by investing in both Janus Triton 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 Triton 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 Triton Fund and Conestoga Small Cap, you can compare the effects of market volatilities on Janus Triton 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 Triton with a short position of Conestoga Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janus Triton and Conestoga Small.

Diversification Opportunities for Janus Triton and Conestoga Small

0.97

Correlation Coefficient

Janus Triton  Conestoga Small

Almost no diversification

The 3 months correlation between Janus and CONESTOGA is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Janus Triton 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 Triton 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 Triton 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 Triton i.e., Janus Triton and Conestoga Small go up and down completely randomly.

Pair Corralation between Janus Triton and Conestoga Small

Assuming the 90 days horizon Janus Triton is expected to generate 1.55 times less return on investment than Conestoga Small. But when comparing it to its historical volatility, Janus Triton Fund is 1.36 times less risky than Conestoga Small. It trades about 0.16 of its potential returns per unit of risk. Conestoga Small Cap is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  7,297  in Conestoga Small Cap on September 4, 2024 and sell it today you would earn a total of  1,055  from holding Conestoga Small Cap or generate 14.46% return on investment over 90 days.

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

Janus Triton Fund  vs.  Conestoga Small Cap

Janus Triton

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Triton Fund are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Janus Triton may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Conestoga Small Cap

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Conestoga Small Cap are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Conestoga Small showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Janus Triton and Conestoga Small

The main advantage of trading using opposite Janus Triton and Conestoga Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Janus Triton 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.

The idea behind Janus Triton Fund and Conestoga Small 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.

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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.