Correlation Between Janus Detroit and Direxion

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

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

Diversification Opportunities for Janus Detroit and Direxion

-0.8

Correlation Coefficient

Janus Detroit  Direxion

Pay attention - limited upside

The 3 months correlation between Janus and Direxion is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Janus Detroit Street and Direxion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion and Janus Detroit 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 Detroit Street are associated (or correlated) with Direxion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direxion has no effect on the direction of Janus Detroit i.e., Janus Detroit and Direxion go up and down completely randomly.

Pair Corralation between Janus Detroit and Direxion

If you would invest  4,766  in Janus Detroit Street on October 1, 2024 and sell it today you would earn a total of  153.00  from holding Janus Detroit Street or generate 3.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	1.56%
Values	Daily Returns

Janus Detroit Street  vs.  Direxion

Janus Detroit Street

Risk-Adjusted Performance

33 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Detroit Street are ranked lower than 33 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Janus Detroit is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Direxion

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Direxion has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Direxion is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Janus Detroit and Direxion

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

The idea behind Janus Detroit Street and Direxion 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.