Correlation Between Vanguard Small-cap and Janus Henderson
Can any of the company-specific risk be diversified away by investing in both Vanguard Small-cap 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 Vanguard Small-cap and Janus Henderson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Small Cap Value and Janus Henderson Research, you can compare the effects of market volatilities on Vanguard Small-cap 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 Vanguard Small-cap with a short position of Janus Henderson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Small-cap and Janus Henderson.
Diversification Opportunities for Vanguard Small-cap and Janus Henderson
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Janus is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Small Cap Value and Janus Henderson Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Henderson Research and Vanguard Small-cap 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 Vanguard Small Cap Value 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 Research has no effect on the direction of Vanguard Small-cap i.e., Vanguard Small-cap and Janus Henderson go up and down completely randomly.
Pair Corralation between Vanguard Small-cap and Janus Henderson
Assuming the 90 days horizon Vanguard Small Cap Value is expected to generate 1.1 times more return on investment than Janus Henderson. However, Vanguard Small-cap is 1.1 times more volatile than Janus Henderson Research. It trades about 0.28 of its potential returns per unit of risk. Janus Henderson Research is currently generating about 0.09 per unit of risk. If you would invest 4,766 in Vanguard Small Cap Value on August 26, 2024 and sell it today you would earn a total of 364.00 from holding Vanguard Small Cap Value or generate 7.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Small Cap Value vs. Janus Henderson Research
Performance |
| Timeline |
| Vanguard Small Cap |
| Janus Henderson Research |
Vanguard Small-cap and Janus Henderson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Small-cap and Janus Henderson
The main advantage of trading using opposite Vanguard Small-cap and Janus Henderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Small-cap 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.| Vanguard Small-cap vs. Vanguard Mid Cap Value | Vanguard Small-cap vs. Vanguard Value Index | Vanguard Small-cap vs. Vanguard Small Cap Growth | Vanguard Small-cap vs. Vanguard Emerging Markets |
| Janus Henderson vs. Lord Abbett Small | Janus Henderson vs. Palm Valley Capital | Janus Henderson vs. Vanguard Small Cap Value | Janus Henderson vs. Fidelity Small Cap |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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