Correlation Between Janus Research and Wells Fargo

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

By analyzing existing cross correlation between Janus Research Fund and Wells Fargo Enterprise, you can compare the effects of market volatilities on Janus Research and Wells Fargo 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 Research with a short position of Wells Fargo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janus Research and Wells Fargo.

Diversification Opportunities for Janus Research and Wells Fargo

0.96

Correlation Coefficient

Janus Research  Wells Fargo

Almost no diversification

The 3 months correlation between Janus and Wells is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Janus Research Fund and Wells Fargo Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wells Fargo Enterprise and Janus Research 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 Research Fund are associated (or correlated) with Wells Fargo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wells Fargo Enterprise has no effect on the direction of Janus Research i.e., Janus Research and Wells Fargo go up and down completely randomly.

Pair Corralation between Janus Research and Wells Fargo

Assuming the 90 days horizon Janus Research Fund is expected to generate 0.82 times more return on investment than Wells Fargo. However, Janus Research Fund is 1.23 times less risky than Wells Fargo. It trades about -0.08 of its potential returns per unit of risk. Wells Fargo Enterprise is currently generating about -0.07 per unit of risk. If you would invest  8,551  in Janus Research Fund on December 29, 2024 and sell it today you would lose (661.00) from holding Janus Research Fund or give up 7.73% of portfolio value over 90 days.

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

Janus Research Fund  vs.  Wells Fargo Enterprise

Janus Research

Risk-Adjusted Performance

Very Weak

Over the last 90 days Janus Research Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Wells Fargo Enterprise

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wells Fargo Enterprise has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Janus Research and Wells Fargo

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

The idea behind Janus Research Fund and Wells Fargo Enterprise 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.