Correlation Between MicroSectors FANG and Janus Detroit
Can any of the company-specific risk be diversified away by investing in both MicroSectors FANG and Janus Detroit 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 MicroSectors FANG and Janus Detroit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MicroSectors FANG Index and Janus Detroit Street, you can compare the effects of market volatilities on MicroSectors FANG and Janus Detroit 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 MicroSectors FANG with a short position of Janus Detroit. Check out your portfolio center. Please also check ongoing floating volatility patterns of MicroSectors FANG and Janus Detroit.
Diversification Opportunities for MicroSectors FANG and Janus Detroit
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MicroSectors and Janus is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding MicroSectors FANG Index and Janus Detroit Street in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Detroit Street and MicroSectors FANG 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 MicroSectors FANG Index are associated (or correlated) with Janus Detroit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Detroit Street has no effect on the direction of MicroSectors FANG i.e., MicroSectors FANG and Janus Detroit go up and down completely randomly.
Pair Corralation between MicroSectors FANG and Janus Detroit
Given the investment horizon of 90 days MicroSectors FANG Index is expected to under-perform the Janus Detroit. In addition to that, MicroSectors FANG is 38.46 times more volatile than Janus Detroit Street. It trades about -0.25 of its total potential returns per unit of risk. Janus Detroit Street is currently generating about 0.35 per unit of volatility. If you would invest 4,907 in Janus Detroit Street on September 1, 2024 and sell it today you would earn a total of 34.00 from holding Janus Detroit Street or generate 0.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MicroSectors FANG Index vs. Janus Detroit Street
Performance |
| Timeline |
| MicroSectors FANG Index |
| Janus Detroit Street |
MicroSectors FANG and Janus Detroit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MicroSectors FANG and Janus Detroit
The main advantage of trading using opposite MicroSectors FANG and Janus Detroit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MicroSectors FANG position performs unexpectedly, Janus Detroit 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 Detroit will offset losses from the drop in Janus Detroit's long position.| MicroSectors FANG vs. MicroSectors FANG Index | MicroSectors FANG vs. Direxion Daily Semiconductor | MicroSectors FANG vs. Direxion Daily Technology | MicroSectors FANG vs. Direxion Daily SP |
| Janus Detroit vs. Janus Detroit Street | Janus Detroit vs. VanEck ETF Trust | Janus Detroit vs. Janus Henderson Mortgage Backed | Janus Detroit vs. BlackRock AAA CLO |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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