Correlation Between Janus Forty and Henderson European

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

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

Diversification Opportunities for Janus Forty and Henderson European

-0.57

Correlation Coefficient

Janus Forty  Henderson European

Excellent diversification

The 3 months correlation between Janus and Henderson is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Janus Forty Fund and Henderson European Focus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henderson European Focus and Janus Forty 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 Forty Fund are associated (or correlated) with Henderson European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henderson European Focus has no effect on the direction of Janus Forty i.e., Janus Forty and Henderson European go up and down completely randomly.

Pair Corralation between Janus Forty and Henderson European

Assuming the 90 days horizon Janus Forty Fund is expected to generate 1.15 times more return on investment than Henderson European. However, Janus Forty is 1.15 times more volatile than Henderson European Focus. It trades about 0.09 of its potential returns per unit of risk. Henderson European Focus is currently generating about -0.24 per unit of risk. If you would invest  5,435  in Janus Forty Fund on August 29, 2024 and sell it today you would earn a total of  105.00  from holding Janus Forty Fund or generate 1.93% return on investment over 90 days.

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

Janus Forty Fund  vs.  Henderson European Focus

Janus Forty Fund

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Forty Fund are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Janus Forty may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Henderson European Focus

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Henderson European Focus has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Janus Forty and Henderson European

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

The idea behind Janus Forty Fund and Henderson European Focus 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.

Check out your portfolio center.

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 Stocks Directory module to find actively traded stocks across global markets.