Correlation Between SPDR Portfolio and Janus Henderson

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

By analyzing existing cross correlation between SPDR Portfolio Mortgage and Janus Henderson Short, you can compare the effects of market volatilities on SPDR Portfolio and Janus Henderson 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 SPDR Portfolio with a short position of Janus Henderson. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Portfolio and Janus Henderson.

Diversification Opportunities for SPDR Portfolio and Janus Henderson

0.93

Correlation Coefficient

SPDR Portfolio  Janus Henderson

Almost no diversification

The 3 months correlation between SPDR and Janus is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Portfolio Mortgage and Janus Henderson Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Henderson Short and SPDR Portfolio 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 SPDR Portfolio Mortgage are associated (or correlated) with Janus Henderson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Henderson Short has no effect on the direction of SPDR Portfolio i.e., SPDR Portfolio and Janus Henderson go up and down completely randomly.

Pair Corralation between SPDR Portfolio and Janus Henderson

Given the investment horizon of 90 days SPDR Portfolio Mortgage is expected to generate 8.05 times more return on investment than Janus Henderson. However, SPDR Portfolio is 8.05 times more volatile than Janus Henderson Short. It trades about 0.13 of its potential returns per unit of risk. Janus Henderson Short is currently generating about 0.52 per unit of risk. If you would invest  2,133  in SPDR Portfolio Mortgage on December 27, 2024 and sell it today you would earn a total of  56.00  from holding SPDR Portfolio Mortgage or generate 2.63% return on investment over 90 days.

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

SPDR Portfolio Mortgage  vs.  Janus Henderson Short

SPDR Portfolio Mortgage

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Portfolio Mortgage are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong primary indicators, SPDR Portfolio is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Janus Henderson Short

Risk-Adjusted Performance

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Henderson Short are ranked lower than 41 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong essential indicators, Janus Henderson is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SPDR Portfolio and Janus Henderson

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

The idea behind SPDR Portfolio Mortgage and Janus Henderson Short 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.