Correlation Between NYSE Composite and Janus Research
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Janus Research 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 Research 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 Research Fund, you can compare the effects of market volatilities on NYSE Composite and Janus Research 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 Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Janus Research.
Diversification Opportunities for NYSE Composite and Janus Research
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and JANUS is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Janus Research Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Research 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 Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Research has no effect on the direction of NYSE Composite i.e., NYSE Composite and Janus Research go up and down completely randomly.
Pair Corralation between NYSE Composite and Janus Research
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.7 times less return on investment than Janus Research. But when comparing it to its historical volatility, NYSE Composite is 1.73 times less risky than Janus Research. It trades about 0.14 of its potential returns per unit of risk. Janus Research Fund is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 7,995 in Janus Research Fund on August 29, 2024 and sell it today you would earn a total of 761.00 from holding Janus Research Fund or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Janus Research Fund
Performance |
| Timeline |
NYSE Composite and Janus Research Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Janus Research Fund
Pair trading matchups for Janus Research
Pair Trading with NYSE Composite and Janus Research
The main advantage of trading using opposite NYSE Composite and Janus Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Janus Research 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 Research will offset losses from the drop in Janus Research's long position.| NYSE Composite vs. Sphere Entertainment Co | NYSE Composite vs. Weibo Corp | NYSE Composite vs. BCE Inc | NYSE Composite vs. Pinterest |
| Janus Research vs. Janus Research Fund | Janus Research vs. Janus Global Life | Janus Research vs. Janus Forty Fund | Janus Research vs. Janus Enterprise 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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