Correlation Between Janus Global and Eafe Pure
Can any of the company-specific risk be diversified away by investing in both Janus Global and Eafe Pure 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 Eafe Pure 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 The Eafe Pure, you can compare the effects of market volatilities on Janus Global and Eafe Pure 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 Eafe Pure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janus Global and Eafe Pure.
Diversification Opportunities for Janus Global and Eafe Pure
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Janus and Eafe is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Janus Global Technology and The Eafe Pure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eafe Pure 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 Eafe Pure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eafe Pure has no effect on the direction of Janus Global i.e., Janus Global and Eafe Pure go up and down completely randomly.
Pair Corralation between Janus Global and Eafe Pure
Assuming the 90 days horizon Janus Global Technology is expected to generate 0.85 times more return on investment than Eafe Pure. However, Janus Global Technology is 1.18 times less risky than Eafe Pure. It trades about 0.26 of its potential returns per unit of risk. The Eafe Pure is currently generating about -0.14 per unit of risk. If you would invest 6,643 in Janus Global Technology on September 4, 2024 and sell it today you would earn a total of 352.00 from holding Janus Global Technology or generate 5.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Janus Global Technology vs. The Eafe Pure
Performance |
| Timeline |
| Janus Global Technology |
| Eafe Pure |
Janus Global and Eafe Pure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Janus Global and Eafe Pure
The main advantage of trading using opposite Janus Global and Eafe Pure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Janus Global position performs unexpectedly, Eafe Pure 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 Eafe Pure will offset losses from the drop in Eafe Pure's long position.| Janus Global vs. Janus Global Life | Janus Global vs. Janus Research Fund | Janus Global vs. Janus Enterprise Fund | Janus Global vs. Janus Trarian Fund |
| Eafe Pure vs. Firsthand Alternative Energy | Eafe Pure vs. Gmo Resources | Eafe Pure vs. Franklin Natural Resources | Eafe Pure vs. Fidelity Advisor Energy |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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