Correlation Between Columbia Income and Janus High

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

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

Diversification Opportunities for Columbia Income and Janus High

0.91

Correlation Coefficient

Columbia Income  Janus High

Almost no diversification

The 3 months correlation between Columbia and Janus is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Income Opportunities 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 Columbia Income 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 Columbia Income Opportunities 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 Columbia Income i.e., Columbia Income and Janus High go up and down completely randomly.

Pair Corralation between Columbia Income and Janus High

Assuming the 90 days horizon Columbia Income Opportunities is expected to under-perform the Janus High. But the mutual fund apears to be less risky and, when comparing its historical volatility, Columbia Income Opportunities is 1.17 times less risky than Janus High. The mutual fund trades about -0.16 of its potential returns per unit of risk. The Janus High Yield Fund is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest  741.00  in Janus High Yield Fund on September 30, 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 Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Columbia Income Opportunities  vs.  Janus High Yield Fund

Columbia Income Oppo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Columbia Income Opportunities has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Columbia Income 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

0 of 100

Very Weak

Over the last 90 days Janus High Yield Fund has generated negative risk-adjusted returns adding no value to fund investors. 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 Columbia Income and Janus High

The main advantage of trading using opposite Columbia Income and Janus High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Income 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 Columbia Income Opportunities 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.