Correlation Between Carlyle and Janus Henderson

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

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

Diversification Opportunities for Carlyle and Janus Henderson

0.96

Correlation Coefficient

Carlyle  Janus Henderson

Almost no diversification

The 3 months correlation between Carlyle and Janus is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Janus Henderson Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Henderson Group and Carlyle 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 Carlyle Group 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 Group has no effect on the direction of Carlyle i.e., Carlyle and Janus Henderson go up and down completely randomly.

Pair Corralation between Carlyle and Janus Henderson

Allowing for the 90-day total investment horizon Carlyle Group is expected to under-perform the Janus Henderson. But the stock apears to be less risky and, when comparing its historical volatility, Carlyle Group is 1.06 times less risky than Janus Henderson. The stock trades about -0.04 of its potential returns per unit of risk. The Janus Henderson Group is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  3,101  in Janus Henderson Group on January 19, 2024 and sell it today you would lose (27.00) from holding Janus Henderson Group or give up 0.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	95.45%
Values	Daily Returns

Carlyle Group  vs.  Janus Henderson Group

Carlyle Group

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Carlyle Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical and fundamental indicators, Carlyle reported solid returns over the last few months and may actually be approaching a breakup point.

Janus Henderson Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Henderson Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical indicators, Janus Henderson is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Carlyle and Janus Henderson

The main advantage of trading using opposite Carlyle and Janus Henderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle 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 Carlyle Group and Janus Henderson Group 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.