Correlation Between ECGI Holdings and Janus Henderson

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

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

Diversification Opportunities for ECGI Holdings and Janus Henderson

-0.52

Correlation Coefficient

ECGI Holdings  Janus Henderson

Excellent diversification

The 3 months correlation between ECGI and Janus is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding ECGI Holdings and Janus Henderson Sustainable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Henderson Sust and ECGI Holdings 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 ECGI Holdings 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 Sust has no effect on the direction of ECGI Holdings i.e., ECGI Holdings and Janus Henderson go up and down completely randomly.

Pair Corralation between ECGI Holdings and Janus Henderson

Given the investment horizon of 90 days ECGI Holdings is expected to generate 21.66 times more return on investment than Janus Henderson. However, ECGI Holdings is 21.66 times more volatile than Janus Henderson Sustainable. It trades about 0.09 of its potential returns per unit of risk. Janus Henderson Sustainable is currently generating about 0.29 per unit of risk. If you would invest  0.11  in ECGI Holdings on September 5, 2024 and sell it today you would lose (0.01) from holding ECGI Holdings or give up 9.09% of portfolio value over 90 days.

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

ECGI Holdings  vs.  Janus Henderson Sustainable

ECGI Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ECGI Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Janus Henderson Sust

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Henderson Sustainable are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Janus Henderson may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with ECGI Holdings and Janus Henderson

The main advantage of trading using opposite ECGI Holdings and Janus Henderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECGI Holdings 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 ECGI Holdings and Janus Henderson Sustainable 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..