Correlation Between GM and Janus Henderson
Can any of the company-specific risk be diversified away by investing in both GM 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 GM and Janus Henderson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Janus Henderson Sustainable, you can compare the effects of market volatilities on GM 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 GM with a short position of Janus Henderson. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Janus Henderson.
Diversification Opportunities for GM and Janus Henderson
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GM and Janus is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Janus Henderson Sustainable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Henderson Sust and GM 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 General Motors 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 Sust has no effect on the direction of GM i.e., GM and Janus Henderson go up and down completely randomly.
Pair Corralation between GM and Janus Henderson
Allowing for the 90-day total investment horizon General Motors is expected to generate 9.62 times more return on investment than Janus Henderson. However, GM is 9.62 times more volatile than Janus Henderson Sustainable. It trades about 0.07 of its potential returns per unit of risk. Janus Henderson Sustainable is currently generating about 0.1 per unit of risk. If you would invest 3,617 in General Motors on September 2, 2024 and sell it today you would earn a total of 1,942 from holding General Motors or generate 53.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.67% |
| Values | Daily Returns |
General Motors vs. Janus Henderson Sustainable
Performance |
| Timeline |
| General Motors |
| Janus Henderson Sust |
GM and Janus Henderson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Janus Henderson
The main advantage of trading using opposite GM and Janus Henderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM 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.The idea behind General Motors and Janus Henderson Sustainable 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 Henderson vs. Janus Henderson Net | Janus Henderson vs. Janus Henderson Global | Janus Henderson vs. iShares MSCI Emerging | Janus Henderson vs. Global X Hydrogen |
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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