Correlation Between Australian High and Janus Henderson
Can any of the company-specific risk be diversified away by investing in both Australian High and Janus Henderson 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 Australian High and Janus Henderson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Australian High Interest and Janus Henderson Global, you can compare the effects of market volatilities on Australian High and Janus Henderson 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 Australian High with a short position of Janus Henderson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australian High and Janus Henderson.
Diversification Opportunities for Australian High and Janus Henderson
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Australian and Janus is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Australian High Interest and Janus Henderson Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Henderson Global and Australian High 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 Australian High Interest are associated (or correlated) with Janus Henderson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Henderson Global has no effect on the direction of Australian High i.e., Australian High and Janus Henderson go up and down completely randomly.
Pair Corralation between Australian High and Janus Henderson
Assuming the 90 days trading horizon Australian High is expected to generate 98.73 times less return on investment than Janus Henderson. But when comparing it to its historical volatility, Australian High Interest is 1545.3 times less risky than Janus Henderson. It trades about 0.86 of its potential returns per unit of risk. Janus Henderson Global is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,544 in Janus Henderson Global on September 4, 2024 and sell it today you would earn a total of 1,108 from holding Janus Henderson Global or generate 43.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Australian High Interest vs. Janus Henderson Global
Performance |
| Timeline |
| Australian High Interest |
| Janus Henderson Global |
Australian High and Janus Henderson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Australian High and Janus Henderson
The main advantage of trading using opposite Australian High and Janus Henderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australian High position performs unexpectedly, Janus Henderson 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 Henderson will offset losses from the drop in Janus Henderson's long position.The idea behind Australian High Interest and Janus Henderson Global 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.| Janus Henderson vs. Betashares Asia Technology | Janus Henderson vs. CD Private Equity | Janus Henderson vs. BetaShares Australia 200 | Janus Henderson vs. Australian High Interest |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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