Correlation Between International Value and Janus High

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

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

Diversification Opportunities for International Value and Janus High

-0.31

Correlation Coefficient

International Value  Janus High

Very good diversification

The 3 months correlation between International and Janus is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding International Value Fund and Janus High Yield Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus High Yield and International Value 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 International Value Fund are associated (or correlated) with Janus High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus High Yield has no effect on the direction of International Value i.e., International Value and Janus High go up and down completely randomly.

Pair Corralation between International Value and Janus High

Assuming the 90 days horizon International Value Fund is expected to under-perform the Janus High. In addition to that, International Value is 3.91 times more volatile than Janus High Yield Fund. It trades about -0.16 of its total potential returns per unit of risk. Janus High Yield Fund is currently generating about -0.31 per unit of volatility. If you would invest  742.00  in Janus High Yield Fund on October 12, 2024 and sell it today you would lose (8.00) from holding Janus High Yield Fund or give up 1.08% of portfolio value over 90 days.

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

International Value Fund  vs.  Janus High Yield Fund

International Value

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Value Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, International Value is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Janus High Yield

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Janus High Yield Fund are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Janus High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with International Value and Janus High

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

The idea behind International Value Fund and Janus High Yield Fund 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.