Correlation Between Fabxx and Janus Henderson

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

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

Diversification Opportunities for Fabxx and Janus Henderson

-0.3

Correlation Coefficient

Fabxx  Janus Henderson

Very good diversification

The 3 months correlation between Fabxx and Janus is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Fabxx and Janus Henderson Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Henderson Research and Fabxx 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 Fabxx 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 Research has no effect on the direction of Fabxx i.e., Fabxx and Janus Henderson go up and down completely randomly.

Pair Corralation between Fabxx and Janus Henderson

Assuming the 90 days horizon Fabxx is expected to under-perform the Janus Henderson. In addition to that, Fabxx is 4.11 times more volatile than Janus Henderson Research. It trades about -0.02 of its total potential returns per unit of risk. Janus Henderson Research is currently generating about 0.18 per unit of volatility. If you would invest  7,644  in Janus Henderson Research on September 3, 2024 and sell it today you would earn a total of  895.00  from holding Janus Henderson Research or generate 11.71% return on investment over 90 days.

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

Fabxx  vs.  Janus Henderson Research

Fabxx

Risk-Adjusted Performance

0 of 100

Very Weak

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

Janus Henderson Research

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Henderson Research are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Janus Henderson may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Fabxx and Janus Henderson

The main advantage of trading using opposite Fabxx and Janus Henderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fabxx 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 Fabxx and Janus Henderson Research 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.