Correlation Between Janus Venture and Hartford Midcap

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

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

Diversification Opportunities for Janus Venture and Hartford Midcap

0.96

Correlation Coefficient

Janus Venture  Hartford Midcap

Almost no diversification

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

Pair Corralation between Janus Venture and Hartford Midcap

Assuming the 90 days horizon Janus Venture is expected to generate 1.31 times less return on investment than Hartford Midcap. In addition to that, Janus Venture is 1.16 times more volatile than The Hartford Midcap. It trades about 0.2 of its total potential returns per unit of risk. The Hartford Midcap is currently generating about 0.3 per unit of volatility. If you would invest  3,129  in The Hartford Midcap on September 6, 2024 and sell it today you would earn a total of  558.00  from holding The Hartford Midcap or generate 17.83% return on investment over 90 days.

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

Janus Venture Fund  vs.  The Hartford Midcap

Janus Venture

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Venture Fund are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Janus Venture may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Hartford Midcap

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Midcap are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Hartford Midcap showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Janus Venture and Hartford Midcap

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

The idea behind Janus Venture Fund and The Hartford Midcap 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.