Correlation Between Janus International and American Woodmark

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

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

Diversification Opportunities for Janus International and American Woodmark

-0.1

Correlation Coefficient

Janus International  American Woodmark

Good diversification

The 3 months correlation between Janus and American is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Janus International Group and American Woodmark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Woodmark and Janus International 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 International Group are associated (or correlated) with American Woodmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Woodmark has no effect on the direction of Janus International i.e., Janus International and American Woodmark go up and down completely randomly.

Pair Corralation between Janus International and American Woodmark

Considering the 90-day investment horizon Janus International Group is expected to generate 1.07 times more return on investment than American Woodmark. However, Janus International is 1.07 times more volatile than American Woodmark. It trades about 0.11 of its potential returns per unit of risk. American Woodmark is currently generating about -0.06 per unit of risk. If you would invest  724.00  in Janus International Group on May 6, 2025 and sell it today you would earn a total of  131.00  from holding Janus International Group or generate 18.09% return on investment over 90 days.

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

Janus International Group  vs.  American Woodmark

Janus International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Janus International Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting fundamental drivers, Janus International demonstrated solid returns over the last few months and may actually be approaching a breakup point.

American Woodmark

Risk-Adjusted Performance

Very Weak

Over the last 90 days American Woodmark has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Janus International and American Woodmark

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

The idea behind Janus International Group and American Woodmark 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.