Correlation Between Allianzgi Nfj and Janus Research

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

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

Diversification Opportunities for Allianzgi Nfj and Janus Research

0.69

Correlation Coefficient

Allianzgi Nfj  Janus Research

Poor diversification

The 3 months correlation between Allianzgi and Janus is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Nfj Small Cap and Janus Research Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Research and Allianzgi Nfj 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 Allianzgi Nfj Small Cap are associated (or correlated) with Janus Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Research has no effect on the direction of Allianzgi Nfj i.e., Allianzgi Nfj and Janus Research go up and down completely randomly.

Pair Corralation between Allianzgi Nfj and Janus Research

Assuming the 90 days horizon Allianzgi Nfj is expected to generate 2.87 times less return on investment than Janus Research. But when comparing it to its historical volatility, Allianzgi Nfj Small Cap is 1.03 times less risky than Janus Research. It trades about 0.01 of its potential returns per unit of risk. Janus Research Fund is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  7,284  in Janus Research Fund on December 4, 2024 and sell it today you would earn a total of  740.00  from holding Janus Research Fund or generate 10.16% return on investment over 90 days.

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

Allianzgi Nfj Small Cap  vs.  Janus Research Fund

Allianzgi Nfj Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Allianzgi Nfj Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Janus Research

Risk-Adjusted Performance

Very Weak

Over the last 90 days Janus Research Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Allianzgi Nfj and Janus Research

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

The idea behind Allianzgi Nfj Small Cap and Janus Research 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.