Correlation Between Janus Global and Franklin Natural
Can any of the company-specific risk be diversified away by investing in both Janus Global and Franklin Natural 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 Franklin Natural 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 Franklin Natural Resources, you can compare the effects of market volatilities on Janus Global and Franklin Natural 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 Franklin Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janus Global and Franklin Natural.
Diversification Opportunities for Janus Global and Franklin Natural
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Janus and Franklin is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Janus Global Technology and Franklin Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Natural Res 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 Franklin Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Natural Res has no effect on the direction of Janus Global i.e., Janus Global and Franklin Natural go up and down completely randomly.
Pair Corralation between Janus Global and Franklin Natural
Assuming the 90 days horizon Janus Global Technology is expected to generate 1.25 times more return on investment than Franklin Natural. However, Janus Global is 1.25 times more volatile than Franklin Natural Resources. It trades about 0.15 of its potential returns per unit of risk. Franklin Natural Resources is currently generating about 0.1 per unit of risk. If you would invest 6,237 in Janus Global Technology on September 3, 2024 and sell it today you would earn a total of 692.00 from holding Janus Global Technology or generate 11.1% 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. Franklin Natural Resources
Performance |
| Timeline |
| Janus Global Technology |
| Franklin Natural Res |
Janus Global and Franklin Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Janus Global and Franklin Natural
The main advantage of trading using opposite Janus Global and Franklin Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Janus Global position performs unexpectedly, Franklin Natural 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 Franklin Natural will offset losses from the drop in Franklin Natural'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 Global Research |
| Franklin Natural vs. Invesco Technology Fund | Franklin Natural vs. Janus Global Technology | Franklin Natural vs. Ivy Science And | Franklin Natural vs. Vanguard Information Technology |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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