Correlation Between Janus Forty and Jpmorgan Hedged
Can any of the company-specific risk be diversified away by investing in both Janus Forty and Jpmorgan Hedged 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 Jpmorgan Hedged 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 Jpmorgan Hedged Equity, you can compare the effects of market volatilities on Janus Forty and Jpmorgan Hedged 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 Jpmorgan Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janus Forty and Jpmorgan Hedged.
Diversification Opportunities for Janus Forty and Jpmorgan Hedged
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Janus and Jpmorgan is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Janus Forty Fund and Jpmorgan Hedged Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Hedged Equity 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 Jpmorgan Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Hedged Equity has no effect on the direction of Janus Forty i.e., Janus Forty and Jpmorgan Hedged go up and down completely randomly.
Pair Corralation between Janus Forty and Jpmorgan Hedged
Assuming the 90 days horizon Janus Forty Fund is expected to generate 2.17 times more return on investment than Jpmorgan Hedged. However, Janus Forty is 2.17 times more volatile than Jpmorgan Hedged Equity. It trades about 0.09 of its potential returns per unit of risk. Jpmorgan Hedged Equity is currently generating about 0.16 per unit of risk. If you would invest 5,029 in Janus Forty Fund on August 24, 2024 and sell it today you would earn a total of 1,294 from holding Janus Forty Fund or generate 25.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
Janus Forty Fund vs. Jpmorgan Hedged Equity
Performance |
| Timeline |
| Janus Forty Fund |
| Jpmorgan Hedged Equity |
Janus Forty and Jpmorgan Hedged Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Janus Forty and Jpmorgan Hedged
The main advantage of trading using opposite Janus Forty and Jpmorgan Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Janus Forty position performs unexpectedly, Jpmorgan Hedged 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 Jpmorgan Hedged will offset losses from the drop in Jpmorgan Hedged's long position.| Janus Forty vs. Janus Forty Fund | Janus Forty vs. Janus Forty Fund | Janus Forty vs. Janus Forty Fund | Janus Forty vs. Janus Forty Fund |
| Jpmorgan Hedged vs. Jpmorgan Hedged Equity | Jpmorgan Hedged vs. Jpmorgan Hedged Equity | Jpmorgan Hedged vs. Janus Forty Fund | Jpmorgan Hedged vs. Janus Forty 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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