Correlation Between IShares Global and Janus Enterprise

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

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

Diversification Opportunities for IShares Global and Janus Enterprise

0.06

Correlation Coefficient

IShares Global  Janus Enterprise

Significant 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 Global Clean and Janus Enterprise Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Enterprise and IShares Global 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 Global Clean are associated (or correlated) with Janus Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Enterprise has no effect on the direction of IShares Global i.e., IShares Global and Janus Enterprise go up and down completely randomly.

Pair Corralation between IShares Global and Janus Enterprise

Given the investment horizon of 90 days iShares Global Clean is expected to under-perform the Janus Enterprise. In addition to that, IShares Global is 1.48 times more volatile than Janus Enterprise Fund. It trades about -0.07 of its total potential returns per unit of risk. Janus Enterprise Fund is currently generating about 0.05 per unit of volatility. If you would invest  11,309  in Janus Enterprise Fund on January 26, 2024 and sell it today you would earn a total of  1,599  from holding Janus Enterprise Fund or generate 14.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

iShares Global Clean  vs.  Janus Enterprise Fund

iShares Global Clean

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Global Clean has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, IShares Global is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Janus Enterprise

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Enterprise Fund are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Janus Enterprise is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with IShares Global and Janus Enterprise

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

The idea behind iShares Global Clean and Janus Enterprise Fund 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.