Correlation Between Clearbridge Large and Janus Enterprise

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

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

Diversification Opportunities for Clearbridge Large and Janus Enterprise

0.52

Correlation Coefficient

Clearbridge Large  Janus Enterprise

Very weak diversification

The 3 months correlation between Clearbridge and Janus is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Large Cap and Janus Enterprise Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Enterprise and Clearbridge Large 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 Clearbridge Large Cap are associated (or correlated) with Janus Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Enterprise has no effect on the direction of Clearbridge Large i.e., Clearbridge Large and Janus Enterprise go up and down completely randomly.

Pair Corralation between Clearbridge Large and Janus Enterprise

Assuming the 90 days horizon Clearbridge Large Cap is expected to generate 0.99 times more return on investment than Janus Enterprise. However, Clearbridge Large Cap is 1.01 times less risky than Janus Enterprise. It trades about 0.03 of its potential returns per unit of risk. Janus Enterprise Fund is currently generating about -0.06 per unit of risk. If you would invest  7,483  in Clearbridge Large Cap on October 6, 2024 and sell it today you would earn a total of  128.00  from holding Clearbridge Large Cap or generate 1.71% return on investment over 90 days.

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

Clearbridge Large Cap  vs.  Janus Enterprise Fund

Clearbridge Large Cap

Risk-Adjusted Performance

2 of 100

Weak

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

Janus Enterprise

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Clearbridge Large and Janus Enterprise

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

The idea behind Clearbridge Large Cap and Janus Enterprise 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.