Correlation Between Western Asset and Janus Global
Can any of the company-specific risk be diversified away by investing in both Western Asset and Janus Global 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 Western Asset and Janus Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Diversified and Janus Global Technology, you can compare the effects of market volatilities on Western Asset and Janus Global 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 Western Asset with a short position of Janus Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Janus Global.
Diversification Opportunities for Western Asset and Janus Global
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Western and Janus is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Janus Global Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Global Technology and Western Asset 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 Western Asset Diversified are associated (or correlated) with Janus Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Global Technology has no effect on the direction of Western Asset i.e., Western Asset and Janus Global go up and down completely randomly.
Pair Corralation between Western Asset and Janus Global
Assuming the 90 days horizon Western Asset Diversified is expected to generate 0.15 times more return on investment than Janus Global. However, Western Asset Diversified is 6.71 times less risky than Janus Global. It trades about -0.01 of its potential returns per unit of risk. Janus Global Technology is currently generating about -0.03 per unit of risk. If you would invest 1,561 in Western Asset Diversified on September 13, 2024 and sell it today you would lose (7.00) from holding Western Asset Diversified or give up 0.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Diversified vs. Janus Global Technology
Performance |
| Timeline |
| Western Asset Diversified |
| Janus Global Technology |
Western Asset and Janus Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Janus Global
The main advantage of trading using opposite Western Asset and Janus Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Janus Global 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 Global will offset losses from the drop in Janus Global's long position.| Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard 500 Index | Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard Total Stock |
| Janus Global vs. Gamco Natural Resources | Janus Global vs. Adams Natural Resources | Janus Global vs. Firsthand Alternative Energy | Janus Global vs. Jennison Natural Resources |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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