Correlation Between IShares MSCI and Janus Henderson

Can any of the company-specific risk be diversified away by investing in both IShares MSCI 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 MSCI 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 MSCI EAFE and Janus Henderson Small, you can compare the effects of market volatilities on IShares MSCI 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 MSCI with a short position of Janus Henderson. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and Janus Henderson.

Diversification Opportunities for IShares MSCI and Janus Henderson

0.7

Correlation Coefficient

IShares MSCI  Janus Henderson

Poor diversification

The 3 months correlation between IShares and Janus is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI EAFE and Janus Henderson Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Henderson Small and IShares MSCI 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 MSCI EAFE 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 Small has no effect on the direction of IShares MSCI i.e., IShares MSCI and Janus Henderson go up and down completely randomly.

Pair Corralation between IShares MSCI and Janus Henderson

Considering the 90-day investment horizon IShares MSCI is expected to generate 1.58 times less return on investment than Janus Henderson. But when comparing it to its historical volatility, iShares MSCI EAFE is 1.24 times less risky than Janus Henderson. It trades about 0.08 of its potential returns per unit of risk. Janus Henderson Small is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  6,480  in Janus Henderson Small on May 14, 2025 and sell it today you would earn a total of  412.00  from holding Janus Henderson Small or generate 6.36% return on investment over 90 days.

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

iShares MSCI EAFE  vs.  Janus Henderson Small

iShares MSCI EAFE

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in iShares MSCI EAFE are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, IShares MSCI is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Janus Henderson Small

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Henderson Small are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady primary indicators, Janus Henderson may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with IShares MSCI and Janus Henderson

The main advantage of trading using opposite IShares MSCI and Janus Henderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI 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 MSCI EAFE and Janus Henderson Small 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.