Correlation Between Janus Henderson and IShares ESG

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

By analyzing existing cross correlation between Janus Henderson Mortgage Backed and iShares ESG Aggregate, you can compare the effects of market volatilities on Janus Henderson and IShares ESG 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 IShares ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janus Henderson and IShares ESG.

Diversification Opportunities for Janus Henderson and IShares ESG

0.93

Correlation Coefficient

Janus Henderson  IShares ESG

Almost no diversification

The 3 months correlation between Janus and IShares is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Janus Henderson Mortgage Backe and iShares ESG Aggregate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares ESG Aggregate 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 Mortgage Backed are associated (or correlated) with IShares ESG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares ESG Aggregate has no effect on the direction of Janus Henderson i.e., Janus Henderson and IShares ESG go up and down completely randomly.

Pair Corralation between Janus Henderson and IShares ESG

Given the investment horizon of 90 days Janus Henderson Mortgage Backed is expected to generate 1.21 times more return on investment than IShares ESG. However, Janus Henderson is 1.21 times more volatile than iShares ESG Aggregate. It trades about -0.19 of its potential returns per unit of risk. iShares ESG Aggregate is currently generating about -0.3 per unit of risk. If you would invest  4,485  in Janus Henderson Mortgage Backed on October 3, 2024 and sell it today you would lose (60.00) from holding Janus Henderson Mortgage Backed or give up 1.34% of portfolio value over 90 days.

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

Janus Henderson Mortgage Backe  vs.  iShares ESG Aggregate

Janus Henderson Mort

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Janus Henderson Mortgage Backed has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental drivers, Janus Henderson is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

iShares ESG Aggregate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares ESG Aggregate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, IShares ESG is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Janus Henderson and IShares ESG

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

The idea behind Janus Henderson Mortgage Backed and iShares ESG Aggregate 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..