Correlation Between Janus Balanced and Pear Tree

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

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

Diversification Opportunities for Janus Balanced and Pear Tree

0.97

Correlation Coefficient

Janus Balanced  Pear Tree

Almost no diversification

The 3 months correlation between Janus and Pear is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Janus Balanced Fund and Pear Tree Polaris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pear Tree Polaris and Janus Balanced 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 Balanced Fund are associated (or correlated) with Pear Tree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pear Tree Polaris has no effect on the direction of Janus Balanced i.e., Janus Balanced and Pear Tree go up and down completely randomly.

Pair Corralation between Janus Balanced and Pear Tree

Assuming the 90 days horizon Janus Balanced Fund is expected to generate 0.88 times more return on investment than Pear Tree. However, Janus Balanced Fund is 1.13 times less risky than Pear Tree. It trades about 0.27 of its potential returns per unit of risk. Pear Tree Polaris is currently generating about 0.22 per unit of risk. If you would invest  4,460  in Janus Balanced Fund on May 5, 2025 and sell it today you would earn a total of  393.00  from holding Janus Balanced Fund or generate 8.81% return on investment over 90 days.

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

Janus Balanced Fund  vs.  Pear Tree Polaris

Janus Balanced

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Balanced Fund are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Janus Balanced may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pear Tree Polaris

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pear Tree Polaris are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Pear Tree may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Janus Balanced and Pear Tree

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

The idea behind Janus Balanced Fund and Pear Tree Polaris 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.