Correlation Between First Trust and Janus Henderson
Can any of the company-specific risk be diversified away by investing in both First Trust 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 First Trust and Janus Henderson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Enhanced and Janus Henderson Short, you can compare the effects of market volatilities on First Trust 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 First Trust with a short position of Janus Henderson. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Janus Henderson.
Diversification Opportunities for First Trust and Janus Henderson
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and Janus is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Enhanced 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 First Trust 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 First Trust Enhanced 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 First Trust i.e., First Trust and Janus Henderson go up and down completely randomly.
Pair Corralation between First Trust and Janus Henderson
Given the investment horizon of 90 days First Trust Enhanced is expected to generate 0.41 times more return on investment than Janus Henderson. However, First Trust Enhanced is 2.43 times less risky than Janus Henderson. It trades about 0.54 of its potential returns per unit of risk. Janus Henderson Short is currently generating about 0.21 per unit of risk. If you would invest 5,915 in First Trust Enhanced on February 1, 2024 and sell it today you would earn a total of 40.00 from holding First Trust Enhanced or generate 0.68% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
First Trust Enhanced vs. Janus Henderson Short
Performance |
Timeline |
First Trust Enhanced |
Janus Henderson Short |
First Trust and Janus Henderson Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Trust and Janus Henderson
The main advantage of trading using opposite First Trust and Janus Henderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust 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.First Trust vs. First Trust Low | First Trust vs. First Trust Senior | First Trust vs. First Trust TCW | First Trust vs. First Trust Tactical |
Janus Henderson vs. First Trust Low | Janus Henderson vs. First Trust Senior | Janus Henderson vs. First Trust TCW | Janus Henderson vs. First Trust Tactical |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Global Correlations Find global opportunities by holding instruments from different markets |