Correlation Between Janus Balanced and Janus Global

Can any of the company-specific risk be diversified away by investing in both Janus Balanced 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 Janus Balanced and Janus Global 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 Janus Global Research, you can compare the effects of market volatilities on Janus Balanced 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 Janus Balanced with a short position of Janus Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janus Balanced and Janus Global.

Diversification Opportunities for Janus Balanced and Janus Global

0.74

Correlation Coefficient

Janus Balanced  Janus Global

Poor diversification

The 3 months correlation between Janus and Janus is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Janus Balanced Fund and Janus Global Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Global Research 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 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 Research has no effect on the direction of Janus Balanced i.e., Janus Balanced and Janus Global go up and down completely randomly.

Pair Corralation between Janus Balanced and Janus Global

Assuming the 90 days horizon Janus Balanced is expected to generate 1.38 times less return on investment than Janus Global. But when comparing it to its historical volatility, Janus Balanced Fund is 1.53 times less risky than Janus Global. It trades about 0.09 of its potential returns per unit of risk. Janus Global Research is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  7,872  in Janus Global Research on September 17, 2024 and sell it today you would earn a total of  3,342  from holding Janus Global Research or generate 42.45% return on investment over 90 days.

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

Janus Balanced Fund  vs.  Janus Global Research

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.

Janus Global Research

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Janus Global Research has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Janus Global 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 Janus Global

The main advantage of trading using opposite Janus Balanced and Janus Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Janus Balanced 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 Janus Balanced Fund and Janus Global 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.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.