Correlation Between Amazon and Janus Enterprise

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

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

Diversification Opportunities for Amazon and Janus Enterprise

-0.02

Correlation Coefficient

Amazon  Janus Enterprise

Good diversification

The 3 months correlation between Amazon and Janus is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Janus Enterprise Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Enterprise and Amazon 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 Amazon Inc 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 Amazon i.e., Amazon and Janus Enterprise go up and down completely randomly.

Pair Corralation between Amazon and Janus Enterprise

Given the investment horizon of 90 days Amazon Inc is expected to generate 1.97 times more return on investment than Janus Enterprise. However, Amazon is 1.97 times more volatile than Janus Enterprise Fund. It trades about 0.04 of its potential returns per unit of risk. Janus Enterprise Fund is currently generating about -0.02 per unit of risk. If you would invest  17,676  in Amazon Inc on February 29, 2024 and sell it today you would earn a total of  539.00  from holding Amazon Inc or generate 3.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Amazon Inc  vs.  Janus Enterprise Fund

Amazon Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Amazon Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Amazon 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

0 of 100

Very Weak

Over the last 90 days Janus Enterprise Fund has generated negative risk-adjusted returns adding no value to fund investors. 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 Amazon and Janus Enterprise

The main advantage of trading using opposite Amazon and Janus Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon 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 Amazon Inc 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.