Correlation Between Pimco Flexible and Janus High

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

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

Diversification Opportunities for Pimco Flexible and Janus High

0.2

Correlation Coefficient

Pimco Flexible  Janus High

Modest diversification

The 3 months correlation between Pimco and Janus is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Flexible Municipal 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 Pimco Flexible 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 Pimco Flexible Municipal 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 Pimco Flexible i.e., Pimco Flexible and Janus High go up and down completely randomly.

Pair Corralation between Pimco Flexible and Janus High

Assuming the 90 days horizon Pimco Flexible Municipal is expected to under-perform the Janus High. In addition to that, Pimco Flexible is 1.99 times more volatile than Janus High Yield Fund. It trades about -0.25 of its total potential returns per unit of risk. Janus High Yield Fund is currently generating about -0.15 per unit of volatility. If you would invest  736.00  in Janus High Yield Fund on September 21, 2024 and sell it today you would lose (4.00) from holding Janus High Yield Fund or give up 0.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Pimco Flexible Municipal  vs.  Janus High Yield Fund

Pimco Flexible Municipal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pimco Flexible Municipal has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Pimco Flexible 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 Pimco Flexible and Janus High

The main advantage of trading using opposite Pimco Flexible and Janus High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Flexible 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 Pimco Flexible Municipal 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.

Check out your portfolio center.

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.