Correlation Between Janus Triton and Emerald Growth

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

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

Diversification Opportunities for Janus Triton and Emerald Growth

0.99

Correlation Coefficient

Janus Triton  Emerald Growth

No risk reduction

The 3 months correlation between Janus and Emerald is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Janus Triton Fund and Emerald Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerald Growth and Janus Triton 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 Triton Fund are associated (or correlated) with Emerald Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerald Growth has no effect on the direction of Janus Triton i.e., Janus Triton and Emerald Growth go up and down completely randomly.

Pair Corralation between Janus Triton and Emerald Growth

Assuming the 90 days horizon Janus Triton is expected to generate 1.48 times less return on investment than Emerald Growth. But when comparing it to its historical volatility, Janus Triton Fund is 1.53 times less risky than Emerald Growth. It trades about 0.17 of its potential returns per unit of risk. Emerald Growth Fund is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  2,327  in Emerald Growth Fund on August 31, 2024 and sell it today you would earn a total of  336.00  from holding Emerald Growth Fund or generate 14.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

Janus Triton Fund  vs.  Emerald Growth Fund

Janus Triton

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Triton Fund are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Janus Triton may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Emerald Growth

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Emerald Growth Fund are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Emerald Growth showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Janus Triton and Emerald Growth

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

The idea behind Janus Triton Fund and Emerald Growth 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.