Correlation Between IShares Short and Janus Henderson

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

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

Diversification Opportunities for IShares Short and Janus Henderson

0.96

Correlation Coefficient

IShares Short  Janus Henderson

Almost no diversification

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

Pair Corralation between IShares Short and Janus Henderson

Considering the 90-day investment horizon iShares Short Treasury is expected to generate 0.2 times more return on investment than Janus Henderson. However, iShares Short Treasury is 4.92 times less risky than Janus Henderson. It trades about 0.97 of its potential returns per unit of risk. Janus Henderson Short is currently generating about 0.08 per unit of risk. If you would invest  11,007  in iShares Short Treasury on February 1, 2024 and sell it today you would earn a total of  39.00  from holding iShares Short Treasury or generate 0.35% return on investment over 90 days.

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

iShares Short Treasury  vs.  Janus Henderson Short

iShares Short Treasury

Risk-Adjusted Performance

78 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Short Treasury are ranked lower than 78 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable technical indicators, IShares Short is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Janus Henderson Short

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Henderson Short are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong essential indicators, Janus Henderson is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with IShares Short and Janus Henderson

The main advantage of trading using opposite IShares Short and Janus Henderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Short 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 iShares Short Treasury and Janus Henderson Short 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.