Correlation Between IShares Trust and Janus Detroit

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

By analyzing existing cross correlation between iShares Trust and Janus Detroit Street, you can compare the effects of market volatilities on IShares Trust and Janus Detroit 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 IShares Trust with a short position of Janus Detroit. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and Janus Detroit.

Diversification Opportunities for IShares Trust and Janus Detroit

-0.68

Correlation Coefficient

IShares Trust  Janus Detroit

Excellent diversification

The 3 months correlation between IShares and Janus is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and Janus Detroit Street in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Detroit Street and IShares Trust 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 iShares Trust are associated (or correlated) with Janus Detroit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Detroit Street has no effect on the direction of IShares Trust i.e., IShares Trust and Janus Detroit go up and down completely randomly.

Pair Corralation between IShares Trust and Janus Detroit

Given the investment horizon of 90 days IShares Trust is expected to generate 4.35 times less return on investment than Janus Detroit. In addition to that, IShares Trust is 5.36 times more volatile than Janus Detroit Street. It trades about 0.02 of its total potential returns per unit of risk. Janus Detroit Street is currently generating about 0.48 per unit of volatility. If you would invest  4,924  in Janus Detroit Street on September 21, 2024 and sell it today you would earn a total of  156.00  from holding Janus Detroit Street or generate 3.17% return on investment over 90 days.

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

iShares Trust   vs.  Janus Detroit Street

iShares Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, IShares Trust is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Janus Detroit Street

Risk-Adjusted Performance

39 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Detroit Street are ranked lower than 39 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Janus Detroit is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with IShares Trust and Janus Detroit

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

The idea behind iShares Trust and Janus Detroit Street 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.