Correlation Between Janus Henderson and JIB

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

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

Diversification Opportunities for Janus Henderson and JIB

-0.15

Correlation Coefficient

Janus Henderson  JIB

Good diversification

The 3 months correlation between Janus and JIB is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Janus Henderson and JIB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JIB 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 are associated (or correlated) with JIB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JIB has no effect on the direction of Janus Henderson i.e., Janus Henderson and JIB go up and down completely randomly.

Pair Corralation between Janus Henderson and JIB

Given the investment horizon of 90 days Janus Henderson is expected to under-perform the JIB. In addition to that, Janus Henderson is 3.51 times more volatile than JIB. It trades about -0.02 of its total potential returns per unit of risk. JIB is currently generating about -0.01 per unit of volatility. If you would invest  4,219  in JIB on October 26, 2024 and sell it today you would lose (20.00) from holding JIB or give up 0.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.15%
Values	Daily Returns

Janus Henderson  vs.  JIB

Janus Henderson

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Janus Henderson has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Janus Henderson is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

JIB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JIB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, JIB is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Janus Henderson and JIB

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

The idea behind Janus Henderson and JIB 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.