Correlation Between Northern Lights and Janus Henderson
Can any of the company-specific risk be diversified away by investing in both Northern Lights 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 Northern Lights and Janus Henderson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northern Lights and Janus Henderson Mid, you can compare the effects of market volatilities on Northern Lights 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 Northern Lights with a short position of Janus Henderson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Lights and Janus Henderson.
Diversification Opportunities for Northern Lights and Janus Henderson
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Northern and Janus is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Northern Lights and Janus Henderson Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Henderson Mid and Northern Lights 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 Northern Lights 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 Mid has no effect on the direction of Northern Lights i.e., Northern Lights and Janus Henderson go up and down completely randomly.
Pair Corralation between Northern Lights and Janus Henderson
Given the investment horizon of 90 days Northern Lights is expected to under-perform the Janus Henderson. But the etf apears to be less risky and, when comparing its historical volatility, Northern Lights is 1.29 times less risky than Janus Henderson. The etf trades about -0.05 of its potential returns per unit of risk. The Janus Henderson Mid is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,837 in Janus Henderson Mid on October 22, 2024 and sell it today you would earn a total of 65.20 from holding Janus Henderson Mid or generate 2.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northern Lights vs. Janus Henderson Mid
Performance |
| Timeline |
| Northern Lights |
| Janus Henderson Mid |
Northern Lights and Janus Henderson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern Lights and Janus Henderson
The main advantage of trading using opposite Northern Lights and Janus Henderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Lights 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.| Northern Lights vs. Sterling Capital Focus | Northern Lights vs. Northern Lights | Northern Lights vs. First Trust Exchange Traded | Northern Lights vs. Northern Lights |
| Janus Henderson vs. FT Vest Equity | Janus Henderson vs. Northern Lights | Janus Henderson vs. Dimensional International High | Janus Henderson vs. JPMorgan Fundamental Data |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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