Correlation Between Intermediate Term and Janus High

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

By analyzing existing cross correlation between Intermediate Term Tax Free Bond and Janus High Yield Fund, you can compare the effects of market volatilities on Intermediate Term and Janus High 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 Intermediate Term with a short position of Janus High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intermediate Term and Janus High.

Diversification Opportunities for Intermediate Term and Janus High

0.27

Correlation Coefficient

Intermediate Term  Janus High

Modest diversification

The 3 months correlation between Intermediate and Janus is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Intermediate Term Tax Free Bon and Janus High Yield Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus High Yield and Intermediate Term 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 Intermediate Term Tax Free Bond are associated (or correlated) with Janus High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus High Yield has no effect on the direction of Intermediate Term i.e., Intermediate Term and Janus High go up and down completely randomly.

Pair Corralation between Intermediate Term and Janus High

Assuming the 90 days horizon Intermediate Term is expected to generate 97.5 times less return on investment than Janus High. In addition to that, Intermediate Term is 1.16 times more volatile than Janus High Yield Fund. It trades about 0.0 of its total potential returns per unit of risk. Janus High Yield Fund is currently generating about 0.11 per unit of volatility. If you would invest  732.00  in Janus High Yield Fund on September 14, 2024 and sell it today you would earn a total of  9.00  from holding Janus High Yield Fund or generate 1.23% return on investment over 90 days.

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

Intermediate Term Tax Free Bon  vs.  Janus High Yield Fund

Intermediate Term Tax

Risk-Adjusted Performance

0 of 100

Very Weak

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

Janus High Yield

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Janus High Yield Fund are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Janus High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Intermediate Term and Janus High

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

The idea behind Intermediate Term Tax Free Bond and Janus High Yield 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 Transaction History module to view history of all your transactions and understand their impact on performance.