Correlation Between Vanguard Russell and Janus Henderson

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

By analyzing existing cross correlation between Vanguard Russell 2000 and Janus Henderson Small, you can compare the effects of market volatilities on Vanguard Russell 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 Vanguard Russell with a short position of Janus Henderson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Russell and Janus Henderson.

Diversification Opportunities for Vanguard Russell and Janus Henderson

0.97

Correlation Coefficient

Vanguard Russell  Janus Henderson

Almost no diversification

The 3 months correlation between Vanguard and Janus is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Russell 2000 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 Vanguard Russell 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 Vanguard Russell 2000 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 Vanguard Russell i.e., Vanguard Russell and Janus Henderson go up and down completely randomly.

Pair Corralation between Vanguard Russell and Janus Henderson

Assuming the 90 days horizon Vanguard Russell 2000 is expected to generate 1.03 times more return on investment than Janus Henderson. However, Vanguard Russell is 1.03 times more volatile than Janus Henderson Small. It trades about 0.15 of its potential returns per unit of risk. Janus Henderson Small is currently generating about 0.15 per unit of risk. If you would invest  36,462  in Vanguard Russell 2000 on May 8, 2025 and sell it today you would earn a total of  4,157  from holding Vanguard Russell 2000 or generate 11.4% return on investment over 90 days.

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

Vanguard Russell 2000  vs.  Janus Henderson Small

Vanguard Russell 2000

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Russell 2000 are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, Vanguard Russell may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Janus Henderson Small

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Henderson Small are ranked lower than 11 (%) 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 Vanguard Russell and Janus Henderson

The main advantage of trading using opposite Vanguard Russell and Janus Henderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Russell 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 Vanguard Russell 2000 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.