Correlation Between Perkins Small and Janus Forty
Can any of the company-specific risk be diversified away by investing in both Perkins Small and Janus Forty 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 Perkins Small and Janus Forty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perkins Small Cap and Janus Forty Fund, you can compare the effects of market volatilities on Perkins Small and Janus Forty 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 Perkins Small with a short position of Janus Forty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perkins Small and Janus Forty.
Diversification Opportunities for Perkins Small and Janus Forty
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Perkins and JANUS is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Perkins Small Cap and Janus Forty Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Forty Fund and Perkins Small 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 Perkins Small Cap are associated (or correlated) with Janus Forty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Forty Fund has no effect on the direction of Perkins Small i.e., Perkins Small and Janus Forty go up and down completely randomly.
Pair Corralation between Perkins Small and Janus Forty
Assuming the 90 days horizon Perkins Small Cap is expected to generate 1.88 times more return on investment than Janus Forty. However, Perkins Small is 1.88 times more volatile than Janus Forty Fund. It trades about 0.26 of its potential returns per unit of risk. Janus Forty Fund is currently generating about 0.25 per unit of risk. If you would invest 2,522 in Perkins Small Cap on September 4, 2024 and sell it today you would earn a total of 245.00 from holding Perkins Small Cap or generate 9.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perkins Small Cap vs. Janus Forty Fund
Performance |
| Timeline |
| Perkins Small Cap |
| Janus Forty Fund |
Perkins Small and Janus Forty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perkins Small and Janus Forty
The main advantage of trading using opposite Perkins Small and Janus Forty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perkins Small position performs unexpectedly, Janus Forty 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 Janus Forty will offset losses from the drop in Janus Forty's long position.| Perkins Small vs. Perkins Mid Cap | Perkins Small vs. Janus Triton Fund | Perkins Small vs. Janus Overseas Fund | Perkins Small vs. Real Return Fund |
| Janus Forty vs. Janus Overseas Fund | Janus Forty vs. Thornburg International Value | Janus Forty vs. Janus Forty Fund | Janus Forty 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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