Correlation Between NYSE Composite and Janus High-yield

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Janus High-yield 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 NYSE Composite and Janus High-yield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Janus High Yield Fund, you can compare the effects of market volatilities on NYSE Composite and Janus High-yield 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 NYSE Composite with a short position of Janus High-yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Janus High-yield.

Diversification Opportunities for NYSE Composite and Janus High-yield

0.79
  Correlation Coefficient

Poor diversification

The 3 months correlation between NYSE and Janus is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Janus High Yield Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus High Yield and NYSE Composite 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 NYSE Composite are associated (or correlated) with Janus High-yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus High Yield has no effect on the direction of NYSE Composite i.e., NYSE Composite and Janus High-yield go up and down completely randomly.
    Optimize

Pair Corralation between NYSE Composite and Janus High-yield

Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.81 times more return on investment than Janus High-yield. However, NYSE Composite is 3.81 times more volatile than Janus High Yield Fund. It trades about 0.27 of its potential returns per unit of risk. Janus High Yield Fund is currently generating about 0.26 per unit of risk. If you would invest  1,945,669  in NYSE Composite on August 30, 2024 and sell it today you would earn a total of  75,313  from holding NYSE Composite or generate 3.87% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

NYSE Composite  vs.  Janus High Yield Fund

 Performance 
       Timeline  

NYSE Composite and Janus High-yield Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with NYSE Composite and Janus High-yield

The main advantage of trading using opposite NYSE Composite and Janus High-yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Janus High-yield 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 High-yield will offset losses from the drop in Janus High-yield's long position.
The idea behind NYSE Composite and Janus High Yield Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

Other Complementary Tools

Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Portfolio Analyzer
Portfolio analysis module that provides access to portfolio diagnostics and optimization engine
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes