Correlation Between Janus Research and Janus Asia

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Can any of the company-specific risk be diversified away by investing in both Janus Research 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 Janus Research and Janus Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Janus Research Fund and Janus Asia Equity, you can compare the effects of market volatilities on Janus Research 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 Janus Research with a short position of Janus Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janus Research and Janus Asia.

Diversification Opportunities for Janus Research and Janus Asia

0.88
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Janus and Janus is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Janus Research Fund 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 Janus Research 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 Research Fund 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 Janus Research i.e., Janus Research and Janus Asia go up and down completely randomly.

Pair Corralation between Janus Research and Janus Asia

Assuming the 90 days horizon Janus Research Fund is expected to generate 1.3 times more return on investment than Janus Asia. However, Janus Research is 1.3 times more volatile than Janus Asia Equity. It trades about 0.05 of its potential returns per unit of risk. Janus Asia Equity is currently generating about -0.01 per unit of risk. If you would invest  5,200  in Janus Research Fund on January 22, 2024 and sell it today you would earn a total of  2,090  from holding Janus Research Fund or generate 40.19% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Janus Research Fund  vs.  Janus Asia Equity

 Performance 
       Timeline  
Janus Research 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Janus Research Fund are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Janus Research is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Janus Asia Equity 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Janus Asia Equity 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 Asia is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Janus Research and Janus Asia Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Janus Research and Janus Asia

The main advantage of trading using opposite Janus Research and Janus Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Janus Research 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 Janus Research Fund 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.

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