Correlation Between Henderson European and Janus Henderson
Can any of the company-specific risk be diversified away by investing in both Henderson European 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 Henderson European and Janus Henderson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Henderson European Focus and Janus Henderson European, you can compare the effects of market volatilities on Henderson European 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 Henderson European with a short position of Janus Henderson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henderson European and Janus Henderson.
Diversification Opportunities for Henderson European and Janus Henderson
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Henderson and Janus is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Henderson European Focus and Janus Henderson European in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Henderson European and Henderson European 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 Henderson European Focus 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 European has no effect on the direction of Henderson European i.e., Henderson European and Janus Henderson go up and down completely randomly.
Pair Corralation between Henderson European and Janus Henderson
Assuming the 90 days horizon Henderson European Focus is expected to under-perform the Janus Henderson. In addition to that, Henderson European is 1.0 times more volatile than Janus Henderson European. It trades about -0.09 of its total potential returns per unit of risk. Janus Henderson European is currently generating about -0.09 per unit of volatility. If you would invest 4,694 in Janus Henderson European on September 2, 2024 and sell it today you would lose (84.00) from holding Janus Henderson European or give up 1.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Henderson European Focus vs. Janus Henderson European
Performance |
| Timeline |
| Henderson European Focus |
| Janus Henderson European |
Henderson European and Janus Henderson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Henderson European and Janus Henderson
The main advantage of trading using opposite Henderson European and Janus Henderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henderson European 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.| Henderson European vs. Invesco European Small | Henderson European vs. Invesco European Growth | Henderson European vs. Jpmorgan Intrepid European |
| Janus Henderson vs. Invesco European Small | Janus Henderson vs. Henderson European Focus | Janus Henderson vs. Invesco European Growth | Janus Henderson vs. Jpmorgan Intrepid European |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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