Correlation Between Janus Henderson and Global X

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

By analyzing existing cross correlation between Janus Henderson SmallMid and Global X SP, you can compare the effects of market volatilities on Janus Henderson and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janus Henderson and Global X.

Diversification Opportunities for Janus Henderson and Global X

0.93

Correlation Coefficient

Janus Henderson  Global X

Almost no diversification

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

Pair Corralation between Janus Henderson and Global X

Given the investment horizon of 90 days Janus Henderson SmallMid is expected to under-perform the Global X. In addition to that, Janus Henderson is 1.22 times more volatile than Global X SP. It trades about -0.24 of its total potential returns per unit of risk. Global X SP is currently generating about -0.12 per unit of volatility. If you would invest  7,299  in Global X SP on October 10, 2024 and sell it today you would lose (186.00) from holding Global X SP or give up 2.55% 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 SmallMid  vs.  Global X SP

Janus Henderson SmallMid

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Henderson SmallMid are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, Janus Henderson is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Global X SP

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Global X SP are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Global X is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Janus Henderson and Global X

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

The idea behind Janus Henderson SmallMid and Global X SP 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.