Correlation Between Janus International and Gibraltar Industries

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

Diversification Opportunities for Janus International and Gibraltar Industries

0.64

Correlation Coefficient

Janus International  Gibraltar Industries

Poor diversification

The 3 months correlation between Janus and Gibraltar is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Janus International Group and Gibraltar Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gibraltar Industries 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 Gibraltar Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gibraltar Industries has no effect on the direction of Janus International i.e., Janus International and Gibraltar Industries go up and down completely randomly.

Pair Corralation between Janus International and Gibraltar Industries

Considering the 90-day investment horizon Janus International Group is expected to under-perform the Gibraltar Industries. In addition to that, Janus International is 1.14 times more volatile than Gibraltar Industries. It trades about -0.11 of its total potential returns per unit of risk. Gibraltar Industries is currently generating about 0.04 per unit of volatility. If you would invest  6,791  in Gibraltar Industries on July 10, 2024 and sell it today you would earn a total of  310.00  from holding Gibraltar Industries or generate 4.56% return on investment over 90 days.

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

Janus International Group  vs.  Gibraltar Industries

Janus International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Janus International Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's fundamental drivers remain fairly strong which may send shares a bit higher in November 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Gibraltar Industries

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gibraltar Industries are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental indicators, Gibraltar Industries may actually be approaching a critical reversion point that can send shares even higher in November 2024.

Pair Trading with Janus International and Gibraltar Industries

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

The idea behind Janus International Group and Gibraltar Industries 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.