Correlation Between Janus Contrarian and Capital World
Can any of the company-specific risk be diversified away by investing in both Janus Contrarian and Capital World 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 Contrarian and Capital World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Janus Trarian Fund and Capital World Growth, you can compare the effects of market volatilities on Janus Contrarian and Capital World 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 Contrarian with a short position of Capital World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janus Contrarian and Capital World.
Diversification Opportunities for Janus Contrarian and Capital World
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Janus and Capital is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Janus Trarian Fund and Capital World Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital World Growth and Janus Contrarian 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 Trarian Fund are associated (or correlated) with Capital World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital World Growth has no effect on the direction of Janus Contrarian i.e., Janus Contrarian and Capital World go up and down completely randomly.
Pair Corralation between Janus Contrarian and Capital World
Assuming the 90 days horizon Janus Trarian Fund is expected to generate 1.76 times more return on investment than Capital World. However, Janus Contrarian is 1.76 times more volatile than Capital World Growth. It trades about 0.11 of its potential returns per unit of risk. Capital World Growth is currently generating about -0.03 per unit of risk. If you would invest 3,086 in Janus Trarian Fund on August 31, 2024 and sell it today you would earn a total of 146.00 from holding Janus Trarian Fund or generate 4.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Janus Trarian Fund vs. Capital World Growth
Performance |
| Timeline |
| Janus Contrarian |
| Capital World Growth |
Janus Contrarian and Capital World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Janus Contrarian and Capital World
The main advantage of trading using opposite Janus Contrarian and Capital World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Janus Contrarian position performs unexpectedly, Capital World 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 Capital World will offset losses from the drop in Capital World's long position.| Janus Contrarian vs. Janus Global Select | Janus Contrarian vs. Janus Overseas Fund | Janus Contrarian vs. Janus Global Technology | Janus Contrarian vs. Janus Research Fund |
| Capital World vs. Janus Trarian Fund | Capital World vs. Janus Research Fund | Capital World vs. Janus Enterprise Fund | Capital World vs. Janus Global Technology |
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 CEOs Directory module to screen CEOs from public companies around the world.
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