Correlation Between Janus Global and Aqr Large
Can any of the company-specific risk be diversified away by investing in both Janus Global and Aqr Large 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 Aqr Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Janus Global Allocation and Aqr Large Cap, you can compare the effects of market volatilities on Janus Global and Aqr Large 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 Aqr Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janus Global and Aqr Large.
Diversification Opportunities for Janus Global and Aqr Large
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Janus and Aqr is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Janus Global Allocation and Aqr Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Large Cap 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 Allocation are associated (or correlated) with Aqr Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Large Cap has no effect on the direction of Janus Global i.e., Janus Global and Aqr Large go up and down completely randomly.
Pair Corralation between Janus Global and Aqr Large
Assuming the 90 days horizon Janus Global is expected to generate 2.92 times less return on investment than Aqr Large. But when comparing it to its historical volatility, Janus Global Allocation is 1.84 times less risky than Aqr Large. It trades about 0.24 of its potential returns per unit of risk. Aqr Large Cap is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 2,395 in Aqr Large Cap on September 1, 2024 and sell it today you would earn a total of 186.00 from holding Aqr Large Cap or generate 7.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Janus Global Allocation vs. Aqr Large Cap
Performance |
| Timeline |
| Janus Global Allocation |
| Aqr Large Cap |
Janus Global and Aqr Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Janus Global and Aqr Large
The main advantage of trading using opposite Janus Global and Aqr Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Janus Global position performs unexpectedly, Aqr Large 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 Aqr Large will offset losses from the drop in Aqr Large's long position.| Janus Global vs. Aqr Large Cap | Janus Global vs. M Large Cap | Janus Global vs. Fidelity Series 1000 | Janus Global vs. Tax Managed Large Cap |
| Aqr Large vs. Aqr Large Cap | Aqr Large vs. Aqr International Defensive | Aqr Large vs. Aqr International Defensive | Aqr Large vs. Aqr Long Short Equity |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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