Correlation Between Janus Forty and Henderson European
Can any of the company-specific risk be diversified away by investing in both Janus Forty and Henderson European 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 Forty and Henderson European into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Janus Forty Fund and Henderson European Focus, you can compare the effects of market volatilities on Janus Forty and Henderson European 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 Forty with a short position of Henderson European. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janus Forty and Henderson European.
Diversification Opportunities for Janus Forty and Henderson European
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Janus and Henderson is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Janus Forty Fund and Henderson European Focus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henderson European Focus and Janus Forty 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 Forty Fund are associated (or correlated) with Henderson European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henderson European Focus has no effect on the direction of Janus Forty i.e., Janus Forty and Henderson European go up and down completely randomly.
Pair Corralation between Janus Forty and Henderson European
Assuming the 90 days horizon Janus Forty Fund is expected to generate 1.12 times more return on investment than Henderson European. However, Janus Forty is 1.12 times more volatile than Henderson European Focus. It trades about 0.1 of its potential returns per unit of risk. Henderson European Focus is currently generating about 0.04 per unit of risk. If you would invest 3,754 in Janus Forty Fund on August 26, 2024 and sell it today you would earn a total of 1,770 from holding Janus Forty Fund or generate 47.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Janus Forty Fund vs. Henderson European Focus
Performance |
| Timeline |
| Janus Forty Fund |
| Henderson European Focus |
Janus Forty and Henderson European Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Janus Forty and Henderson European
The main advantage of trading using opposite Janus Forty and Henderson European positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Janus Forty position performs unexpectedly, Henderson European 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 Henderson European will offset losses from the drop in Henderson European's long position.| Janus Forty vs. Janus Overseas Fund | Janus Forty vs. Janus Enterprise Fund | Janus Forty vs. The Hartford Growth | Janus Forty vs. Janus Forty Fund |
| Henderson European vs. Invesco European Small | Henderson European vs. Henderson European Focus | Henderson European vs. Invesco European Growth | Henderson European vs. Jpmorgan Intrepid European |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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