Correlation Between Janus High and Vanguard High-yield
Can any of the company-specific risk be diversified away by investing in both Janus High and Vanguard High-yield 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 and Vanguard High-yield 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 Vanguard High Yield Corporate, you can compare the effects of market volatilities on Janus High and Vanguard High-yield 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 with a short position of Vanguard High-yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janus High and Vanguard High-yield.
Diversification Opportunities for Janus High and Vanguard High-yield
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Janus and Vanguard is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Janus High Yield Fund and Vanguard High Yield Corporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard High Yield and Janus High 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 Vanguard High-yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard High Yield has no effect on the direction of Janus High i.e., Janus High and Vanguard High-yield go up and down completely randomly.
Pair Corralation between Janus High and Vanguard High-yield
Assuming the 90 days horizon Janus High Yield Fund is expected to generate 1.19 times more return on investment than Vanguard High-yield. However, Janus High is 1.19 times more volatile than Vanguard High Yield Corporate. It trades about 0.19 of its potential returns per unit of risk. Vanguard High Yield Corporate is currently generating about 0.23 per unit of risk. If you would invest 703.00 in Janus High Yield Fund on September 1, 2024 and sell it today you would earn a total of 37.00 from holding Janus High Yield Fund or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Janus High Yield Fund vs. Vanguard High Yield Corporate
Performance |
| Timeline |
| Janus High Yield |
| Vanguard High Yield |
Janus High and Vanguard High-yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Janus High and Vanguard High-yield
The main advantage of trading using opposite Janus High and Vanguard High-yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Janus High position performs unexpectedly, Vanguard High-yield 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 Vanguard High-yield will offset losses from the drop in Vanguard High-yield's long position.| Janus High vs. Janus Forty Fund | Janus High vs. Janus Flexible Bond | Janus High vs. Janus Enterprise Fund | Janus High vs. Janus Overseas 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |