Correlation Between Janus Henderson and Vanguard Mid

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

Diversification Opportunities for Janus Henderson and Vanguard Mid

0.88

Correlation Coefficient

Janus Henderson  Vanguard Mid

Very poor diversification

The 3 months correlation between Janus and Vanguard is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Janus Henderson SmallMid and Vanguard Mid Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Mid Cap 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 Vanguard Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Mid Cap has no effect on the direction of Janus Henderson i.e., Janus Henderson and Vanguard Mid go up and down completely randomly.

Pair Corralation between Janus Henderson and Vanguard Mid

Given the investment horizon of 90 days Janus Henderson is expected to generate 1.13 times less return on investment than Vanguard Mid. In addition to that, Janus Henderson is 1.37 times more volatile than Vanguard Mid Cap Growth. It trades about 0.15 of its total potential returns per unit of risk. Vanguard Mid Cap Growth is currently generating about 0.24 per unit of volatility. If you would invest  23,647  in Vanguard Mid Cap Growth on September 14, 2024 and sell it today you would earn a total of  3,154  from holding Vanguard Mid Cap Growth or generate 13.34% return on investment over 90 days.

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

Janus Henderson SmallMid  vs.  Vanguard Mid Cap Growth

Janus Henderson SmallMid

Risk-Adjusted Performance

12 of 100

Good

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

Vanguard Mid Cap

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Mid Cap Growth are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Vanguard Mid may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Janus Henderson and Vanguard Mid

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

The idea behind Janus Henderson SmallMid and Vanguard Mid Cap Growth 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.