Correlation Between American Funds and Janus Flexible
Can any of the company-specific risk be diversified away by investing in both American Funds and Janus Flexible 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 American Funds and Janus Flexible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Fundamental and Janus Flexible Bond, you can compare the effects of market volatilities on American Funds and Janus Flexible 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 American Funds with a short position of Janus Flexible. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Janus Flexible.
Diversification Opportunities for American Funds and Janus Flexible
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Janus is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Fundamental and Janus Flexible Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Flexible Bond and American Funds 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 American Funds Fundamental are associated (or correlated) with Janus Flexible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Flexible Bond has no effect on the direction of American Funds i.e., American Funds and Janus Flexible go up and down completely randomly.
Pair Corralation between American Funds and Janus Flexible
Assuming the 90 days horizon American Funds Fundamental is expected to generate 2.82 times more return on investment than Janus Flexible. However, American Funds is 2.82 times more volatile than Janus Flexible Bond. It trades about 0.2 of its potential returns per unit of risk. Janus Flexible Bond is currently generating about 0.03 per unit of risk. If you would invest 8,096 in American Funds Fundamental on November 3, 2024 and sell it today you would earn a total of 322.00 from holding American Funds Fundamental or generate 3.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds Fundamental vs. Janus Flexible Bond
Performance |
| Timeline |
| American Funds Funda |
| Janus Flexible Bond |
American Funds and Janus Flexible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Janus Flexible
The main advantage of trading using opposite American Funds and Janus Flexible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Janus Flexible 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 Flexible will offset losses from the drop in Janus Flexible's long position.| American Funds vs. World Energy Fund | American Funds vs. Energy Services Fund | American Funds vs. Alpsalerian Energy Infrastructure | American Funds vs. Icon Natural Resources |
| Janus Flexible vs. Janus Short Term Bond | Janus Flexible vs. Janus High Yield Fund | Janus Flexible vs. Janus Balanced Fund | Janus Flexible vs. Janus Growth And |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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