Correlation Between Janus Forty and Cb Large

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

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

Diversification Opportunities for Janus Forty and Cb Large

0.73

Correlation Coefficient

Janus Forty  Cb Large

Poor diversification

The 3 months correlation between Janus and CBLSX is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Janus Forty Fund and Cb Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cb Large Cap and Janus Forty 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 Forty Fund are associated (or correlated) with Cb Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cb Large Cap has no effect on the direction of Janus Forty i.e., Janus Forty and Cb Large go up and down completely randomly.

Pair Corralation between Janus Forty and Cb Large

Assuming the 90 days horizon Janus Forty Fund is expected to generate 1.35 times more return on investment than Cb Large. However, Janus Forty is 1.35 times more volatile than Cb Large Cap. It trades about 0.08 of its potential returns per unit of risk. Cb Large Cap is currently generating about 0.06 per unit of risk. If you would invest  4,397  in Janus Forty Fund on September 14, 2024 and sell it today you would earn a total of  1,593  from holding Janus Forty Fund or generate 36.23% return on investment over 90 days.

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

Janus Forty Fund  vs.  Cb Large Cap

Janus Forty Fund

Risk-Adjusted Performance

0 of 100

Very Weak

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

Cb Large Cap

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cb Large Cap are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Cb Large 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 Forty and Cb Large

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

The idea behind Janus Forty Fund and Cb Large Cap 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.