Correlation Between Dow Jones and Janus Forty
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Janus Forty 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 Dow Jones and Janus Forty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Janus Forty Fund, you can compare the effects of market volatilities on Dow Jones and Janus Forty 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 Dow Jones with a short position of Janus Forty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Janus Forty.
Diversification Opportunities for Dow Jones and Janus Forty
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dow and Janus is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Janus Forty Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Forty Fund and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with Janus Forty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Forty Fund has no effect on the direction of Dow Jones i.e., Dow Jones and Janus Forty go up and down completely randomly.
Pair Corralation between Dow Jones and Janus Forty
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.91 times more return on investment than Janus Forty. However, Dow Jones Industrial is 1.1 times less risky than Janus Forty. It trades about 0.27 of its potential returns per unit of risk. Janus Forty Fund is currently generating about 0.07 per unit of risk. If you would invest 4,223,305 in Dow Jones Industrial on August 30, 2024 and sell it today you would earn a total of 248,901 from holding Dow Jones Industrial or generate 5.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Dow Jones Industrial vs. Janus Forty Fund
Performance |
| Timeline |
Dow Jones and Janus Forty Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Janus Forty Fund
Pair trading matchups for Janus Forty
Pair Trading with Dow Jones and Janus Forty
The main advantage of trading using opposite Dow Jones and Janus Forty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Janus Forty 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 Forty will offset losses from the drop in Janus Forty's long position.| Dow Jones vs. Skillful Craftsman Education | Dow Jones vs. Acco Brands | Dow Jones vs. Cracker Barrel Old | Dow Jones vs. Coursera |
| Janus Forty vs. Janus Forty Fund | Janus Forty vs. Janus Research Fund | Janus Forty vs. Brown Advisory Sustainable | Janus Forty vs. Janus Venture Fund |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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