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 Mortgage Backed, 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
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Janus is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Janus Henderson Mortgage Backe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Henderson Mort 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 Mort 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 6.26 times more return on investment than Janus Henderson. However, GM is 6.26 times more volatile than Janus Henderson Mortgage Backed. It trades about 0.07 of its potential returns per unit of risk. Janus Henderson Mortgage Backed is currently generating about 0.05 per unit of risk. If you would invest 5,273 in General Motors on August 29, 2024 and sell it today you would earn a total of 206.00 from holding General Motors or generate 3.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Janus Henderson Mortgage Backe
Performance |
| Timeline |
| General Motors |
| Janus Henderson Mort |
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 Mortgage Backed 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. SPDR Portfolio Mortgage | Janus Henderson vs. Janus Henderson Short | Janus Henderson vs. iShares CMBS ETF | Janus Henderson vs. Janus Detroit Street |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |