Correlation Between Janus Research and Perkins Mid

Can any of the company-specific risk be diversified away by investing in both Janus Research and Perkins Mid 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 Perkins Mid 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 Perkins Mid Cap, you can compare the effects of market volatilities on Janus Research and Perkins Mid 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 Perkins Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janus Research and Perkins Mid.

Diversification Opportunities for Janus Research and Perkins Mid

0.89

Correlation Coefficient

Janus Research  Perkins Mid

Very poor diversification

The 3 months correlation between Janus and Perkins is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Janus Research Fund and Perkins Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perkins Mid Cap 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 Perkins Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perkins Mid Cap has no effect on the direction of Janus Research i.e., Janus Research and Perkins Mid go up and down completely randomly.

Pair Corralation between Janus Research and Perkins Mid

Assuming the 90 days horizon Janus Research Fund is expected to generate 1.76 times more return on investment than Perkins Mid. However, Janus Research is 1.76 times more volatile than Perkins Mid Cap. It trades about -0.12 of its potential returns per unit of risk. Perkins Mid Cap is currently generating about -0.3 per unit of risk. If you would invest  7,603  in Janus Research Fund on January 31, 2024 and sell it today you would lose (218.00) from holding Janus Research Fund or give up 2.87% of portfolio value over 90 days.

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

Janus Research Fund  vs.  Perkins Mid Cap

Janus Research

Risk-Adjusted Performance

8 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Research Fund are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Janus Research may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Perkins Mid Cap

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Perkins Mid Cap are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Perkins Mid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Janus Research and Perkins Mid

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

The idea behind Janus Research Fund and Perkins Mid Cap 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.