Correlation Between MicroSectors FANG and Janus Henderson
Can any of the company-specific risk be diversified away by investing in both MicroSectors FANG 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 MicroSectors FANG and Janus Henderson 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 Henderson Mid, you can compare the effects of market volatilities on MicroSectors FANG 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 MicroSectors FANG with a short position of Janus Henderson. Check out your portfolio center. Please also check ongoing floating volatility patterns of MicroSectors FANG and Janus Henderson.
Diversification Opportunities for MicroSectors FANG and Janus Henderson
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MicroSectors and Janus is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding MicroSectors FANG Index and Janus Henderson Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Henderson Mid 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 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 Mid has no effect on the direction of MicroSectors FANG i.e., MicroSectors FANG and Janus Henderson go up and down completely randomly.
Pair Corralation between MicroSectors FANG and Janus Henderson
Given the investment horizon of 90 days MicroSectors FANG Index is expected to generate 3.81 times more return on investment than Janus Henderson. However, MicroSectors FANG is 3.81 times more volatile than Janus Henderson Mid. It trades about -0.04 of its potential returns per unit of risk. Janus Henderson Mid is currently generating about -0.25 per unit of risk. If you would invest 1,390 in MicroSectors FANG Index on October 7, 2024 and sell it today you would lose (89.00) from holding MicroSectors FANG Index or give up 6.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MicroSectors FANG Index vs. Janus Henderson Mid
Performance |
| Timeline |
| MicroSectors FANG Index |
| Janus Henderson Mid |
MicroSectors FANG and Janus Henderson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MicroSectors FANG and Janus Henderson
The main advantage of trading using opposite MicroSectors FANG and Janus Henderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MicroSectors FANG 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.| 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 Henderson vs. JPMorgan Fundamental Data | Janus Henderson vs. Matthews China Discovery | Janus Henderson vs. Davis Select International | Janus Henderson vs. Dimensional ETF Trust |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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