Correlation Between Janus Global and State Street

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

By analyzing existing cross correlation between Janus Global Allocation and State Street Target, you can compare the effects of market volatilities on Janus Global and State Street 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 Global with a short position of State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janus Global and State Street.

Diversification Opportunities for Janus Global and State Street

0.99

Correlation Coefficient

Janus Global  State Street

No risk reduction

The 3 months correlation between Janus and State is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Janus Global Allocation and State Street Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Target and Janus Global 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 Global Allocation are associated (or correlated) with State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Target has no effect on the direction of Janus Global i.e., Janus Global and State Street go up and down completely randomly.

Pair Corralation between Janus Global and State Street

Assuming the 90 days horizon Janus Global is expected to generate 1.12 times less return on investment than State Street. But when comparing it to its historical volatility, Janus Global Allocation is 1.21 times less risky than State Street. It trades about 0.31 of its potential returns per unit of risk. State Street Target is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  1,443  in State Street Target on May 1, 2025 and sell it today you would earn a total of  135.00  from holding State Street Target or generate 9.36% return on investment over 90 days.

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

Janus Global Allocation  vs.  State Street Target

Janus Global Allocation

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Global Allocation are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Janus Global may actually be approaching a critical reversion point that can send shares even higher in August 2025.

State Street Target

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in State Street Target are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward-looking signals, State Street may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Janus Global and State Street

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

The idea behind Janus Global Allocation and State Street Target 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.