Correlation Between Janus Balanced and International Growth
Can any of the company-specific risk be diversified away by investing in both Janus Balanced and International Growth 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 Janus Balanced and International Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Janus Balanced Fund and International Growth Fund, you can compare the effects of market volatilities on Janus Balanced and International Growth 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 Janus Balanced with a short position of International Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janus Balanced and International Growth.
Diversification Opportunities for Janus Balanced and International Growth
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Janus and International is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Janus Balanced Fund and International Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Growth and Janus Balanced 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 Janus Balanced Fund are associated (or correlated) with International Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Growth has no effect on the direction of Janus Balanced i.e., Janus Balanced and International Growth go up and down completely randomly.
Pair Corralation between Janus Balanced and International Growth
Assuming the 90 days horizon Janus Balanced Fund is expected to generate 0.6 times more return on investment than International Growth. However, Janus Balanced Fund is 1.68 times less risky than International Growth. It trades about 0.11 of its potential returns per unit of risk. International Growth Fund is currently generating about 0.03 per unit of risk. If you would invest 3,695 in Janus Balanced Fund on August 30, 2024 and sell it today you would earn a total of 1,177 from holding Janus Balanced Fund or generate 31.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Janus Balanced Fund vs. International Growth Fund
Performance |
| Timeline |
| Janus Balanced |
| International Growth |
Janus Balanced and International Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Janus Balanced and International Growth
The main advantage of trading using opposite Janus Balanced and International Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Janus Balanced position performs unexpectedly, International Growth 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 International Growth will offset losses from the drop in International Growth's long position.| Janus Balanced vs. Janus Global Research | Janus Balanced vs. Janus Enterprise Fund | Janus Balanced vs. Janus Forty Fund | Janus Balanced vs. Janus Overseas Fund |
| International Growth vs. Europacific Growth Fund | International Growth vs. Europacific Growth Fund | International Growth vs. Europacific Growth Fund | International Growth vs. Europacific Growth 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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