Correlation Between Dow Jones and Janus Balanced
Can any of the company-specific risk be diversified away by investing in both Dow Jones 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 Dow Jones and Janus Balanced 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 Balanced Fund, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of Janus Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Janus Balanced.
Diversification Opportunities for Dow Jones and Janus Balanced
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dow and Janus is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Janus Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Balanced 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 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 Dow Jones i.e., Dow Jones and Janus Balanced go up and down completely randomly.
Pair Corralation between Dow Jones and Janus Balanced
Assuming the 90 days trading horizon Dow Jones Industrial is expected to under-perform the Janus Balanced. In addition to that, Dow Jones is 1.25 times more volatile than Janus Balanced Fund. It trades about -0.22 of its total potential returns per unit of risk. Janus Balanced Fund is currently generating about 0.04 per unit of volatility. If you would invest 4,626 in Janus Balanced Fund on November 27, 2024 and sell it today you would earn a total of 19.00 from holding Janus Balanced Fund or generate 0.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Janus Balanced Fund
Performance |
| Timeline |
Dow Jones and Janus Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Janus Balanced Fund
Pair trading matchups for Janus Balanced
Pair Trading with Dow Jones and Janus Balanced
The main advantage of trading using opposite Dow Jones and Janus Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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 Dow Jones Industrial 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.| Janus Balanced vs. Janus Forty Fund | Janus Balanced vs. Janus Flexible Bond | Janus Balanced vs. Janus Enterprise Fund | Janus Balanced vs. Janus Balanced 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |