Correlation Between Janus Forty and Large Cap
Can any of the company-specific risk be diversified away by investing in both Janus Forty and Large Cap 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 Forty and Large Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Janus Forty Fund and Large Cap Growth, you can compare the effects of market volatilities on Janus Forty and Large Cap 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 Forty with a short position of Large Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janus Forty and Large Cap.
Diversification Opportunities for Janus Forty and Large Cap
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between JANUS and Large is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Janus Forty Fund and Large Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Large Cap Growth and Janus Forty 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 Forty Fund are associated (or correlated) with Large Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Large Cap Growth has no effect on the direction of Janus Forty i.e., Janus Forty and Large Cap go up and down completely randomly.
Pair Corralation between Janus Forty and Large Cap
Assuming the 90 days horizon Janus Forty Fund is expected to generate 1.02 times more return on investment than Large Cap. However, Janus Forty is 1.02 times more volatile than Large Cap Growth. It trades about 0.11 of its potential returns per unit of risk. Large Cap Growth is currently generating about 0.1 per unit of risk. If you would invest 5,079 in Janus Forty Fund on September 1, 2024 and sell it today you would earn a total of 756.00 from holding Janus Forty Fund or generate 14.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Janus Forty Fund vs. Large Cap Growth
Performance |
| Timeline |
| Janus Forty Fund |
| Large Cap Growth |
Janus Forty and Large Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Janus Forty and Large Cap
The main advantage of trading using opposite Janus Forty and Large Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Janus Forty position performs unexpectedly, Large Cap 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 Large Cap will offset losses from the drop in Large Cap's long position.| Janus Forty vs. Janus Forty Fund | Janus Forty vs. Janus Research Fund | Janus Forty vs. Brown Advisory Sustainable | Janus Forty vs. Janus Venture Fund |
| Large Cap vs. Large Cap E | Large Cap vs. International Fund International | Large Cap vs. Parnassus Endeavor Fund | Large Cap vs. Parnassus E Equity |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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