Correlation Between Janus Overseas and Alger Midcap

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

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

Diversification Opportunities for Janus Overseas and Alger Midcap

-0.65

Correlation Coefficient

Janus Overseas  Alger Midcap

Excellent diversification

The 3 months correlation between Janus and Alger is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Janus Overseas Fund and Alger Midcap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Midcap Growth and Janus Overseas 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 Overseas Fund are associated (or correlated) with Alger Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Midcap Growth has no effect on the direction of Janus Overseas i.e., Janus Overseas and Alger Midcap go up and down completely randomly.

Pair Corralation between Janus Overseas and Alger Midcap

Assuming the 90 days horizon Janus Overseas Fund is expected to generate 0.52 times more return on investment than Alger Midcap. However, Janus Overseas Fund is 1.9 times less risky than Alger Midcap. It trades about -0.17 of its potential returns per unit of risk. Alger Midcap Growth is currently generating about -0.16 per unit of risk. If you would invest  4,614  in Janus Overseas Fund on September 24, 2024 and sell it today you would lose (117.00) from holding Janus Overseas Fund or give up 2.54% of portfolio value over 90 days.

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

Janus Overseas Fund  vs.  Alger Midcap Growth

Janus Overseas

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Janus Overseas Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Alger Midcap Growth

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alger Midcap Growth are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Alger Midcap may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Janus Overseas and Alger Midcap

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

The idea behind Janus Overseas Fund and Alger Midcap Growth 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.