Correlation Between IShares SP and Janus Henderson
Can any of the company-specific risk be diversified away by investing in both IShares SP 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 IShares SP and Janus Henderson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares SP Small Cap and Janus Henderson Small, you can compare the effects of market volatilities on IShares SP 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 IShares SP with a short position of Janus Henderson. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SP and Janus Henderson.
Diversification Opportunities for IShares SP and Janus Henderson
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and Janus is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding iShares SP Small Cap and Janus Henderson Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Henderson Small and IShares SP 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 iShares SP Small Cap 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 Small has no effect on the direction of IShares SP i.e., IShares SP and Janus Henderson go up and down completely randomly.
Pair Corralation between IShares SP and Janus Henderson
Considering the 90-day investment horizon IShares SP is expected to generate 1.6 times less return on investment than Janus Henderson. But when comparing it to its historical volatility, iShares SP Small Cap is 1.0 times less risky than Janus Henderson. It trades about 0.04 of its potential returns per unit of risk. Janus Henderson Small is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 4,795 in Janus Henderson Small on September 2, 2024 and sell it today you would earn a total of 2,493 from holding Janus Henderson Small or generate 51.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares SP Small Cap vs. Janus Henderson Small
Performance |
| Timeline |
| iShares SP Small |
| Janus Henderson Small |
IShares SP and Janus Henderson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SP and Janus Henderson
The main advantage of trading using opposite IShares SP and Janus Henderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SP 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.| IShares SP vs. iShares SP Small Cap | IShares SP vs. iShares SP Mid Cap | IShares SP vs. iShares SP Mid Cap | IShares SP vs. iShares SP 500 |
| Janus Henderson vs. Janus Henderson SmallMid | Janus Henderson vs. First Trust Small | Janus Henderson vs. ClearBridge Large Cap | Janus Henderson vs. First Trust Multi |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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