Correlation Between First Trust and Janus Henderson
Can any of the company-specific risk be diversified away by investing in both First Trust and Janus Henderson 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 First Trust and Janus Henderson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Low and Janus Henderson Short, you can compare the effects of market volatilities on First Trust and Janus Henderson 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 First Trust with a short position of Janus Henderson. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Janus Henderson.
Diversification Opportunities for First Trust and Janus Henderson
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and Janus is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Low and Janus Henderson Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Henderson Short and First Trust 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 First Trust Low are associated (or correlated) with Janus Henderson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Henderson Short has no effect on the direction of First Trust i.e., First Trust and Janus Henderson go up and down completely randomly.
Pair Corralation between First Trust and Janus Henderson
Given the investment horizon of 90 days First Trust Low is expected to generate 3.58 times more return on investment than Janus Henderson. However, First Trust is 3.58 times more volatile than Janus Henderson Short. It trades about 0.11 of its potential returns per unit of risk. Janus Henderson Short is currently generating about 0.33 per unit of risk. If you would invest 4,856 in First Trust Low on October 24, 2024 and sell it today you would earn a total of 17.00 from holding First Trust Low or generate 0.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Low vs. Janus Henderson Short
Performance |
| Timeline |
| First Trust Low |
| Janus Henderson Short |
First Trust and Janus Henderson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Janus Henderson
The main advantage of trading using opposite First Trust and Janus Henderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Janus Henderson 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 Henderson will offset losses from the drop in Janus Henderson's long position.| First Trust vs. FlexShares Disciplined Duration | First Trust vs. Vanguard Mortgage Backed Securities | First Trust vs. Simplify Exchange Traded | First Trust vs. WisdomTree Mortgage Plus |
| Janus Henderson vs. Invesco Variable Rate | Janus Henderson vs. Invesco Ultra Short | Janus Henderson vs. SPDR Bloomberg Investment | Janus Henderson vs. First Trust Low |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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