Correlation Between Fidelity Select and Janus Global

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

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

Diversification Opportunities for Fidelity Select and Janus Global

-0.41

Correlation Coefficient

Fidelity Select  Janus Global

Very good diversification

The 3 months correlation between Fidelity and Janus is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Select Semiconductors and Janus Global Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Global Life and Fidelity Select 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 Fidelity Select Semiconductors are associated (or correlated) with Janus Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Global Life has no effect on the direction of Fidelity Select i.e., Fidelity Select and Janus Global go up and down completely randomly.

Pair Corralation between Fidelity Select and Janus Global

Assuming the 90 days horizon Fidelity Select Semiconductors is expected to generate 1.78 times more return on investment than Janus Global. However, Fidelity Select is 1.78 times more volatile than Janus Global Life. It trades about 0.1 of its potential returns per unit of risk. Janus Global Life is currently generating about -0.19 per unit of risk. If you would invest  3,197  in Fidelity Select Semiconductors on September 12, 2024 and sell it today you would earn a total of  333.00  from holding Fidelity Select Semiconductors or generate 10.42% return on investment over 90 days.

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

Fidelity Select Semiconductors  vs.  Janus Global Life

Fidelity Select Semi

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Select Semiconductors are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Fidelity Select may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Janus Global Life

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Janus Global Life has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Fidelity Select and Janus Global

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

The idea behind Fidelity Select Semiconductors and Janus Global Life 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.