Correlation Between Janus International and Interface

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

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

Diversification Opportunities for Janus International and Interface

-0.82

Correlation Coefficient

Janus International  Interface

Pay attention - limited upside

The 3 months correlation between Janus and Interface is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Janus International Group and Interface in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interface and Janus International 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 International Group are associated (or correlated) with Interface. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interface has no effect on the direction of Janus International i.e., Janus International and Interface go up and down completely randomly.

Pair Corralation between Janus International and Interface

Considering the 90-day investment horizon Janus International is expected to generate 18.28 times less return on investment than Interface. But when comparing it to its historical volatility, Janus International Group is 2.33 times less risky than Interface. It trades about 0.04 of its potential returns per unit of risk. Interface is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  1,780  in Interface on August 31, 2024 and sell it today you would earn a total of  872.00  from holding Interface or generate 48.99% return on investment over 90 days.

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

Janus International Group  vs.  Interface

Janus International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Janus International Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain fairly strong which may send shares a bit higher in December 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Interface

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Interface are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak essential indicators, Interface exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Janus International and Interface

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

The idea behind Janus International Group and Interface 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.