Correlation Between Janus Balanced and Intech Managed

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

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

Diversification Opportunities for Janus Balanced and Intech Managed

0.58

Correlation Coefficient

Janus Balanced  Intech Managed

Very weak diversification

The 3 months correlation between Janus and Intech is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Janus Balanced Fund and Intech Managed Volatility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intech Managed Volatility and Janus Balanced 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 Janus Balanced Fund are associated (or correlated) with Intech Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intech Managed Volatility has no effect on the direction of Janus Balanced i.e., Janus Balanced and Intech Managed go up and down completely randomly.

Pair Corralation between Janus Balanced and Intech Managed

Assuming the 90 days horizon Janus Balanced Fund is expected to under-perform the Intech Managed. But the mutual fund apears to be less risky and, when comparing its historical volatility, Janus Balanced Fund is 1.13 times less risky than Intech Managed. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Intech Managed Volatility is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,083  in Intech Managed Volatility on September 21, 2024 and sell it today you would earn a total of  71.00  from holding Intech Managed Volatility or generate 6.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.21%
Values	Daily Returns

Janus Balanced Fund  vs.  Intech Managed Volatility

Janus Balanced

Risk-Adjusted Performance

0 of 100

Very Weak

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

Intech Managed Volatility

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Janus Balanced and Intech Managed

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

The idea behind Janus Balanced Fund and Intech Managed Volatility 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.