Correlation Between Pimco Income and Janus Contrarian

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

By analyzing existing cross correlation between Pimco Income Strategy and Janus Trarian Fund, you can compare the effects of market volatilities on Pimco Income and Janus Contrarian 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 Pimco Income with a short position of Janus Contrarian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Income and Janus Contrarian.

Diversification Opportunities for Pimco Income and Janus Contrarian

0.74

Correlation Coefficient

Pimco Income  Janus Contrarian

Poor diversification

The 12 months correlation between Pimco and Janus is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Income Strategy and Janus Trarian Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Contrarian and Pimco Income 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 Pimco Income Strategy are associated (or correlated) with Janus Contrarian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Contrarian has no effect on the direction of Pimco Income i.e., Pimco Income and Janus Contrarian go up and down completely randomly.

Pair Corralation between Pimco Income and Janus Contrarian

Considering the 90-day investment horizon Pimco Income Strategy is expected to under-perform the Janus Contrarian. But the fund apears to be less risky and, when comparing its historical volatility, Pimco Income Strategy is 1.28 times less risky than Janus Contrarian. The fund trades about -0.18 of its potential returns per unit of risk. The Janus Trarian Fund is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  2,810  in Janus Trarian Fund on March 18, 2024 and sell it today you would lose (57.00) from holding Janus Trarian Fund or give up 2.03% of portfolio value over 90 days.

Time Period	12 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Pimco Income Strategy  vs.  Janus Trarian Fund

Pimco Income Strategy

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Income Strategy are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy technical and fundamental indicators, Pimco Income is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Janus Contrarian

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Trarian Fund are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Janus Contrarian is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pimco Income and Janus Contrarian

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

The idea behind Pimco Income Strategy and Janus Trarian 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.