Correlation Between Growth Fund and Janus Forty
Can any of the company-specific risk be diversified away by investing in both Growth Fund and Janus Forty 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 Growth Fund and Janus Forty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Fund Investor and Janus Forty Fund, you can compare the effects of market volatilities on Growth Fund and Janus Forty 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 Growth Fund with a short position of Janus Forty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and Janus Forty.
Diversification Opportunities for Growth Fund and Janus Forty
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Growth and Janus is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Investor and Janus Forty Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Forty Fund and Growth Fund 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 Growth Fund Investor are associated (or correlated) with Janus Forty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Forty Fund has no effect on the direction of Growth Fund i.e., Growth Fund and Janus Forty go up and down completely randomly.
Pair Corralation between Growth Fund and Janus Forty
Assuming the 90 days horizon Growth Fund Investor is expected to generate 0.37 times more return on investment than Janus Forty. However, Growth Fund Investor is 2.73 times less risky than Janus Forty. It trades about 0.19 of its potential returns per unit of risk. Janus Forty Fund is currently generating about -0.19 per unit of risk. If you would invest 6,087 in Growth Fund Investor on September 12, 2024 and sell it today you would earn a total of 193.00 from holding Growth Fund Investor or generate 3.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Fund Investor vs. Janus Forty Fund
Performance |
| Timeline |
| Growth Fund Investor |
| Janus Forty Fund |
Growth Fund and Janus Forty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and Janus Forty
The main advantage of trading using opposite Growth Fund and Janus Forty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund position performs unexpectedly, Janus Forty 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 Forty will offset losses from the drop in Janus Forty's long position.| Growth Fund vs. Select Fund Investor | Growth Fund vs. International Growth Fund | Growth Fund vs. Heritage Fund Investor | Growth Fund vs. Janus Global Research |
| Janus Forty vs. Growth Fund Investor | Janus Forty vs. Select Fund Investor | Janus Forty vs. International Growth Fund | Janus Forty vs. Heritage Fund Investor |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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