Correlation Between Janus Henderson and Vanguard 500
Can any of the company-specific risk be diversified away by investing in both Janus Henderson and Vanguard 500 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 Janus Henderson and Vanguard 500 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Janus Henderson Growth and Vanguard 500 Index, you can compare the effects of market volatilities on Janus Henderson and Vanguard 500 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 Janus Henderson with a short position of Vanguard 500. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janus Henderson and Vanguard 500.
Diversification Opportunities for Janus Henderson and Vanguard 500
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Janus and Vanguard is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Janus Henderson Growth and Vanguard 500 Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard 500 Index and Janus Henderson 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 Janus Henderson Growth are associated (or correlated) with Vanguard 500. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard 500 Index has no effect on the direction of Janus Henderson i.e., Janus Henderson and Vanguard 500 go up and down completely randomly.
Pair Corralation between Janus Henderson and Vanguard 500
Assuming the 90 days horizon Janus Henderson is expected to generate 1.42 times less return on investment than Vanguard 500. But when comparing it to its historical volatility, Janus Henderson Growth is 1.08 times less risky than Vanguard 500. It trades about 0.03 of its potential returns per unit of risk. Vanguard 500 Index is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 38,466 in Vanguard 500 Index on January 24, 2024 and sell it today you would earn a total of 7,797 from holding Vanguard 500 Index or generate 20.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Janus Henderson Growth vs. Vanguard 500 Index
Performance |
| Timeline |
| Janus Henderson Growth |
| Vanguard 500 Index |
Janus Henderson and Vanguard 500 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Janus Henderson and Vanguard 500
The main advantage of trading using opposite Janus Henderson and Vanguard 500 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Janus Henderson position performs unexpectedly, Vanguard 500 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 Vanguard 500 will offset losses from the drop in Vanguard 500's long position.| Janus Henderson vs. Janus Enterprise Fund | Janus Henderson vs. Siit Dynamic Asset | Janus Henderson vs. Columbia Large Cap | Janus Henderson vs. Siit Large Cap |
| Vanguard 500 vs. Vanguard Mid Cap Index | Vanguard 500 vs. Vanguard Small Cap Index | Vanguard 500 vs. Vanguard Total Bond | Vanguard 500 vs. Vanguard Total International |
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 Stocks Directory module to find actively traded stocks across global markets.
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