Correlation Between Janus Global and Federated Kaufmann
Can any of the company-specific risk be diversified away by investing in both Janus Global and Federated Kaufmann 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 Federated Kaufmann 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 Federated Kaufmann Small, you can compare the effects of market volatilities on Janus Global and Federated Kaufmann 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 Federated Kaufmann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janus Global and Federated Kaufmann.
Diversification Opportunities for Janus Global and Federated Kaufmann
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Janus and Federated is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Janus Global Technology and Federated Kaufmann Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Kaufmann Small 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 Federated Kaufmann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Kaufmann Small has no effect on the direction of Janus Global i.e., Janus Global and Federated Kaufmann go up and down completely randomly.
Pair Corralation between Janus Global and Federated Kaufmann
Assuming the 90 days horizon Janus Global Technology is expected to generate 1.2 times more return on investment than Federated Kaufmann. However, Janus Global is 1.2 times more volatile than Federated Kaufmann Small. It trades about 0.07 of its potential returns per unit of risk. Federated Kaufmann Small is currently generating about 0.05 per unit of risk. If you would invest 5,140 in Janus Global Technology on September 12, 2024 and sell it today you would earn a total of 1,231 from holding Janus Global Technology or generate 23.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Janus Global Technology vs. Federated Kaufmann Small
Performance |
| Timeline |
| Janus Global Technology |
| Federated Kaufmann Small |
Janus Global and Federated Kaufmann Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Janus Global and Federated Kaufmann
The main advantage of trading using opposite Janus Global and Federated Kaufmann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Janus Global position performs unexpectedly, Federated Kaufmann 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 Federated Kaufmann will offset losses from the drop in Federated Kaufmann'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 |
| Federated Kaufmann vs. Janus Global Technology | Federated Kaufmann vs. Pgim Jennison Technology | Federated Kaufmann vs. Fidelity Advisor Technology | Federated Kaufmann vs. Hennessy Technology 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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