Correlation Between Janus Flexible and Janus Balanced

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

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

Diversification Opportunities for Janus Flexible and Janus Balanced

-0.54

Correlation Coefficient

Janus Flexible  Janus Balanced

Excellent diversification

The 3 months correlation between Janus and JANUS is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Janus Flexible Bond and Janus Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Balanced and Janus Flexible 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 Flexible Bond are associated (or correlated) with Janus Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Balanced has no effect on the direction of Janus Flexible i.e., Janus Flexible and Janus Balanced go up and down completely randomly.

Pair Corralation between Janus Flexible and Janus Balanced

Assuming the 90 days horizon Janus Flexible Bond is expected to under-perform the Janus Balanced. But the mutual fund apears to be less risky and, when comparing its historical volatility, Janus Flexible Bond is 1.54 times less risky than Janus Balanced. The mutual fund trades about -0.09 of its potential returns per unit of risk. The Janus Balanced Fund is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  4,672  in Janus Balanced Fund on September 5, 2024 and sell it today you would earn a total of  261.00  from holding Janus Balanced Fund or generate 5.59% return on investment over 90 days.

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

Janus Flexible Bond  vs.  Janus Balanced Fund

Janus Flexible Bond

Risk-Adjusted Performance

0 of 100

Very Weak

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

Janus Balanced

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Balanced Fund are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Janus Balanced 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 Flexible and Janus Balanced

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

The idea behind Janus Flexible Bond and Janus Balanced Fund 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.