Correlation Between Mid Cap and Janus Triton

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

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

Diversification Opportunities for Mid Cap and Janus Triton

0.92

Correlation Coefficient

Mid Cap  Janus Triton

Almost no diversification

The 3 months correlation between Mid and Janus is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap Value and Janus Triton Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Triton and Mid Cap 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 Mid Cap Value are associated (or correlated) with Janus Triton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Triton has no effect on the direction of Mid Cap i.e., Mid Cap and Janus Triton go up and down completely randomly.

Pair Corralation between Mid Cap and Janus Triton

Assuming the 90 days horizon Mid Cap is expected to generate 1.81 times less return on investment than Janus Triton. But when comparing it to its historical volatility, Mid Cap Value is 1.35 times less risky than Janus Triton. It trades about 0.12 of its potential returns per unit of risk. Janus Triton Fund is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  2,881  in Janus Triton Fund on September 3, 2024 and sell it today you would earn a total of  275.00  from holding Janus Triton Fund or generate 9.55% return on investment over 90 days.

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

Mid Cap Value  vs.  Janus Triton Fund

Mid Cap Value

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mid Cap Value are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Mid Cap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Janus Triton

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Triton Fund are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Janus Triton may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Mid Cap and Janus Triton

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

The idea behind Mid Cap Value and Janus Triton 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.