Correlation Between GM and Janus Global
Can any of the company-specific risk be diversified away by investing in both GM and Janus Global 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 Global 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 Global Unconstrained, you can compare the effects of market volatilities on GM and Janus Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Janus Global.
Diversification Opportunities for GM and Janus Global
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GM and Janus is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Janus Global Unconstrained in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Global Unconst 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Global Unconst has no effect on the direction of GM i.e., GM and Janus Global go up and down completely randomly.
Pair Corralation between GM and Janus Global
Allowing for the 90-day total investment horizon General Motors is expected to generate 28.79 times more return on investment than Janus Global. However, GM is 28.79 times more volatile than Janus Global Unconstrained. It trades about 0.07 of its potential returns per unit of risk. Janus Global Unconstrained is currently generating about 0.15 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Janus Global Unconstrained
Performance |
| Timeline |
| General Motors |
| Janus Global Unconst |
GM and Janus Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Janus Global
The main advantage of trading using opposite GM and Janus Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Janus Global 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 Global will offset losses from the drop in Janus Global's long position.The idea behind General Motors and Janus Global Unconstrained 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 Global vs. Janus Research Fund | Janus Global vs. Janus Research Fund | Janus Global vs. Janus Research Fund | Janus Global vs. Janus Research 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |