Correlation Between IShares 25 and Janus Henderson

Can any of the company-specific risk be diversified away by investing in both IShares 25 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 IShares 25 and Janus Henderson into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between iShares 25 Year and Janus Henderson Sustainable, you can compare the effects of market volatilities on IShares 25 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 IShares 25 with a short position of Janus Henderson. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares 25 and Janus Henderson.

Diversification Opportunities for IShares 25 and Janus Henderson

-0.06

Correlation Coefficient

IShares 25  Janus Henderson

Good diversification

The 3 months correlation between IShares and Janus is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding iShares 25 Year and Janus Henderson Sustainable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Henderson Sust and IShares 25 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 iShares 25 Year 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 Sust has no effect on the direction of IShares 25 i.e., IShares 25 and Janus Henderson go up and down completely randomly.

Pair Corralation between IShares 25 and Janus Henderson

Given the investment horizon of 90 days iShares 25 Year is expected to generate 6.26 times more return on investment than Janus Henderson. However, IShares 25 is 6.26 times more volatile than Janus Henderson Sustainable. It trades about 0.12 of its potential returns per unit of risk. Janus Henderson Sustainable is currently generating about -0.2 per unit of risk. If you would invest  1,044  in iShares 25 Year on March 5, 2024 and sell it today you would earn a total of  29.00  from holding iShares 25 Year or generate 2.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	30.0%
Values	Daily Returns

iShares 25 Year  vs.  Janus Henderson Sustainable

iShares 25 Year

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares 25 Year has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, IShares 25 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Janus Henderson Sust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Janus Henderson Sustainable has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Janus Henderson is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with IShares 25 and Janus Henderson

The main advantage of trading using opposite IShares 25 and Janus Henderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares 25 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.

The idea behind iShares 25 Year and Janus Henderson Sustainable pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.