Correlation Between Smead Funds and Janus Investment
Can any of the company-specific risk be diversified away by investing in both Smead Funds and Janus Investment 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 Smead Funds and Janus Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smead Funds Trust and Janus Investment, you can compare the effects of market volatilities on Smead Funds and Janus Investment 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 Smead Funds with a short position of Janus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smead Funds and Janus Investment.
Diversification Opportunities for Smead Funds and Janus Investment
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Smead and Janus is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Smead Funds Trust and Janus Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Investment and Smead Funds 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 Smead Funds Trust are associated (or correlated) with Janus Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Investment has no effect on the direction of Smead Funds i.e., Smead Funds and Janus Investment go up and down completely randomly.
Pair Corralation between Smead Funds and Janus Investment
Assuming the 90 days horizon Smead Funds Trust is expected to generate 1.25 times more return on investment than Janus Investment. However, Smead Funds is 1.25 times more volatile than Janus Investment. It trades about 0.04 of its potential returns per unit of risk. Janus Investment is currently generating about 0.02 per unit of risk. If you would invest 4,552 in Smead Funds Trust on September 3, 2024 and sell it today you would earn a total of 1,024 from holding Smead Funds Trust or generate 22.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Smead Funds Trust vs. Janus Investment
Performance |
| Timeline |
| Smead Funds Trust |
| Janus Investment |
Smead Funds and Janus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smead Funds and Janus Investment
The main advantage of trading using opposite Smead Funds and Janus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smead Funds position performs unexpectedly, Janus Investment 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 Investment will offset losses from the drop in Janus Investment's long position.| Smead Funds vs. Janus Investment | Smead Funds vs. Dws Government Money | Smead Funds vs. Aig Government Money | Smead Funds vs. Schwab Treasury Money |
| Janus Investment vs. Vanguard Total Stock | Janus Investment vs. Vanguard 500 Index | Janus Investment vs. Vanguard Total Stock | Janus Investment vs. Vanguard Total Stock |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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