Correlation Between Flexible Bond and Janus Henderson
Can any of the company-specific risk be diversified away by investing in both Flexible Bond 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 Flexible Bond and Janus Henderson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flexible Bond Portfolio and Janus Henderson European, you can compare the effects of market volatilities on Flexible Bond 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 Flexible Bond with a short position of Janus Henderson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flexible Bond and Janus Henderson.
Diversification Opportunities for Flexible Bond and Janus Henderson
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Flexible and Janus is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Flexible Bond Portfolio 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 Flexible Bond 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 Flexible Bond Portfolio 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 Flexible Bond i.e., Flexible Bond and Janus Henderson go up and down completely randomly.
Pair Corralation between Flexible Bond and Janus Henderson
Assuming the 90 days horizon Flexible Bond is expected to generate 2.79 times less return on investment than Janus Henderson. But when comparing it to its historical volatility, Flexible Bond Portfolio is 2.22 times less risky than Janus Henderson. It trades about 0.04 of its potential returns per unit of risk. Janus Henderson European is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,753 in Janus Henderson European on August 30, 2024 and sell it today you would earn a total of 801.00 from holding Janus Henderson European or generate 21.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flexible Bond Portfolio vs. Janus Henderson European
Performance |
| Timeline |
| Flexible Bond Portfolio |
| Janus Henderson European |
Flexible Bond and Janus Henderson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flexible Bond and Janus Henderson
The main advantage of trading using opposite Flexible Bond and Janus Henderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flexible Bond 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.| Flexible Bond vs. Janus Research Fund | Flexible Bond vs. Janus Research Fund | Flexible Bond vs. Janus Research Fund | Flexible Bond vs. Janus Henderson Research |
| Janus Henderson vs. Invesco European Small | Janus Henderson vs. Henderson European Focus | Janus Henderson vs. Invesco European Growth | Janus Henderson vs. Aquagold International |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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