Correlation Between Janus Global and Amg River

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Can any of the company-specific risk be diversified away by investing in both Janus Global and Amg River 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 Global and Amg River into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Janus Global Technology and Amg River Road, you can compare the effects of market volatilities on Janus Global and Amg River 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 Global with a short position of Amg River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janus Global and Amg River.

Diversification Opportunities for Janus Global and Amg River

0.63
  Correlation Coefficient

Poor diversification

The 3 months correlation between Janus and Amg is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Janus Global Technology and Amg River Road in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg River Road and Janus Global 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 Global Technology are associated (or correlated) with Amg River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg River Road has no effect on the direction of Janus Global i.e., Janus Global and Amg River go up and down completely randomly.

Pair Corralation between Janus Global and Amg River

Assuming the 90 days horizon Janus Global Technology is expected to under-perform the Amg River. In addition to that, Janus Global is 4.0 times more volatile than Amg River Road. It trades about -0.17 of its total potential returns per unit of risk. Amg River Road is currently generating about 0.09 per unit of volatility. If you would invest  1,560  in Amg River Road on September 12, 2024 and sell it today you would earn a total of  17.00  from holding Amg River Road or generate 1.09% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Janus Global Technology  vs.  Amg River Road

 Performance 
       Timeline  
Janus Global Technology 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Janus Global Technology has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Janus Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Amg River Road 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Amg River Road are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Amg River may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Janus Global and Amg River Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Janus Global and Amg River

The main advantage of trading using opposite Janus Global and Amg River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Janus Global position performs unexpectedly, Amg River 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 Amg River will offset losses from the drop in Amg River's long position.
The idea behind Janus Global Technology and Amg River Road pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Transaction History module to view history of all your transactions and understand their impact on performance.

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