Correlation Between Janus Henderson and Carlyle

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

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

Diversification Opportunities for Janus Henderson and Carlyle

0.95

Correlation Coefficient

Janus Henderson  Carlyle

Almost no diversification

The 3 months correlation between Janus and Carlyle is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Janus Henderson Group and Carlyle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Group 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 Group are associated (or correlated) with Carlyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlyle Group has no effect on the direction of Janus Henderson i.e., Janus Henderson and Carlyle go up and down completely randomly.

Pair Corralation between Janus Henderson and Carlyle

Considering the 90-day investment horizon Janus Henderson Group is expected to under-perform the Carlyle. In addition to that, Janus Henderson is 1.03 times more volatile than Carlyle Group. It trades about -0.05 of its total potential returns per unit of risk. Carlyle Group is currently generating about -0.02 per unit of volatility. If you would invest  4,644  in Carlyle Group on January 26, 2024 and sell it today you would lose (32.00) from holding Carlyle Group or give up 0.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Janus Henderson Group  vs.  Carlyle Group

Janus Henderson Group

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Henderson Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical indicators, Janus Henderson may actually be approaching a critical reversion point that can send shares even higher in May 2024.

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.

Pair Trading with Janus Henderson and Carlyle

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

The idea behind Janus Henderson Group and Carlyle 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.