Correlation Between Janus High-yield and Consumer Services
Can any of the company-specific risk be diversified away by investing in both Janus High-yield and Consumer Services 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 High-yield and Consumer Services into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Janus High Yield Fund and Consumer Services Ultrasector, you can compare the effects of market volatilities on Janus High-yield and Consumer Services 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 High-yield with a short position of Consumer Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janus High-yield and Consumer Services.
Diversification Opportunities for Janus High-yield and Consumer Services
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Janus and Consumer is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Janus High Yield Fund and Consumer Services Ultrasector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consumer Services and Janus High-yield 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 High Yield Fund are associated (or correlated) with Consumer Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consumer Services has no effect on the direction of Janus High-yield i.e., Janus High-yield and Consumer Services go up and down completely randomly.
Pair Corralation between Janus High-yield and Consumer Services
Assuming the 90 days horizon Janus High Yield Fund is expected to generate 0.14 times more return on investment than Consumer Services. However, Janus High Yield Fund is 7.29 times less risky than Consumer Services. It trades about 0.24 of its potential returns per unit of risk. Consumer Services Ultrasector is currently generating about -0.09 per unit of risk. If you would invest 729.00 in Janus High Yield Fund on October 25, 2024 and sell it today you would earn a total of 8.00 from holding Janus High Yield Fund or generate 1.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Janus High Yield Fund vs. Consumer Services Ultrasector
Performance |
| Timeline |
| Janus High Yield |
| Consumer Services |
Janus High-yield and Consumer Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Janus High-yield and Consumer Services
The main advantage of trading using opposite Janus High-yield and Consumer Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Janus High-yield position performs unexpectedly, Consumer Services 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 Consumer Services will offset losses from the drop in Consumer Services' long position.| Janus High-yield vs. Janus Henderson High Yield | Janus High-yield vs. Janus Flexible Bond | Janus High-yield vs. Intech Managed Volatility | Janus High-yield vs. Janus Trarian Fund |
| Consumer Services vs. Morningstar Global Income | Consumer Services vs. Ab Global Bond | Consumer Services vs. Barings Global Floating | Consumer Services vs. Aqr Global Macro |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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