Correlation Between Qs Large and Janus Balanced

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

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

Diversification Opportunities for Qs Large and Janus Balanced

0.55

Correlation Coefficient

Qs Large  Janus Balanced

Very weak diversification

The 3 months correlation between LMUSX and Janus is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Qs Large Cap and Janus Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Balanced and Qs Large 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 Qs Large Cap 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 Qs Large i.e., Qs Large and Janus Balanced go up and down completely randomly.

Pair Corralation between Qs Large and Janus Balanced

Assuming the 90 days horizon Qs Large Cap is expected to generate 0.96 times more return on investment than Janus Balanced. However, Qs Large Cap is 1.04 times less risky than Janus Balanced. It trades about 0.24 of its potential returns per unit of risk. Janus Balanced Fund is currently generating about -0.03 per unit of risk. If you would invest  2,351  in Qs Large Cap on September 15, 2024 and sell it today you would earn a total of  265.00  from holding Qs Large Cap or generate 11.27% return on investment over 90 days.

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

Qs Large Cap  vs.  Janus Balanced Fund

Qs Large Cap

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Qs Large Cap are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Qs Large may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Janus Balanced

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Janus Balanced Fund has generated negative risk-adjusted returns adding no value to fund investors. 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 Qs Large and Janus Balanced

The main advantage of trading using opposite Qs Large and Janus Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qs Large 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 Qs Large Cap 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.