Correlation Between Aquagold International and Janus Asia

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

By analyzing existing cross correlation between Aquagold International and Janus Asia Equity, you can compare the effects of market volatilities on Aquagold International and Janus Asia 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 Aquagold International with a short position of Janus Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquagold International and Janus Asia.

Diversification Opportunities for Aquagold International and Janus Asia

Very good diversification

The 3 months correlation between Aquagold and Janus is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and JANUS ASIA EQUITY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Asia Equity and Aquagold International 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 Aquagold International are associated (or correlated) with Janus Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Asia Equity has no effect on the direction of Aquagold International i.e., Aquagold International and Janus Asia go up and down completely randomly.

Pair Corralation between Aquagold International and Janus Asia

If you would invest  914.00  in Janus Asia Equity on September 3, 2023 and sell it today you would earn a total of  39.00  from holding Janus Asia Equity or generate 4.27% return on investment over 90 days.

Aquagold International  vs.  JANUS ASIA EQUITY

Aquagold International

Aquagold Performance

0 of 100

Over the last 90 days Aquagold International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Aquagold International is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Janus Asia Equity

Janus Performance

2 of 100

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Asia Equity are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Janus Asia is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aquagold International and Janus Asia

The main advantage of trading using opposite Aquagold International and Janus Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquagold International position performs unexpectedly, Janus Asia 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 Asia will offset losses from the drop in Janus Asia's long position.

The idea behind Aquagold International and Janus Asia Equity 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.