Correlation Between Janus Triton and Federated Kaufmann

Can any of the company-specific risk be diversified away by investing in both Janus Triton and Federated Kaufmann 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 Federated Kaufmann 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 Federated Kaufmann Large, you can compare the effects of market volatilities on Janus Triton and Federated Kaufmann 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 Federated Kaufmann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janus Triton and Federated Kaufmann.

Diversification Opportunities for Janus Triton and Federated Kaufmann

0.94

Correlation Coefficient

Janus Triton  Federated Kaufmann

Almost no diversification

The 3 months correlation between Janus and Federated is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Janus Triton Fund and Federated Kaufmann Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Kaufmann Large 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 Federated Kaufmann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Kaufmann Large has no effect on the direction of Janus Triton i.e., Janus Triton and Federated Kaufmann go up and down completely randomly.

Pair Corralation between Janus Triton and Federated Kaufmann

Assuming the 90 days horizon Janus Triton is expected to generate 1.16 times less return on investment than Federated Kaufmann. In addition to that, Janus Triton is 1.2 times more volatile than Federated Kaufmann Large. It trades about 0.26 of its total potential returns per unit of risk. Federated Kaufmann Large is currently generating about 0.36 per unit of volatility. If you would invest  1,877  in Federated Kaufmann Large on September 4, 2024 and sell it today you would earn a total of  130.00  from holding Federated Kaufmann Large or generate 6.93% return on investment over 90 days.

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

Janus Triton Fund  vs.  Federated Kaufmann Large

Janus Triton

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Triton Fund are ranked lower than 12 (%) 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 January 2025.

Federated Kaufmann Large

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Federated Kaufmann Large are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward-looking signals, Federated Kaufmann may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Janus Triton and Federated Kaufmann

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

The idea behind Janus Triton Fund and Federated Kaufmann Large 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.