Correlation Between Prudential High and Janus High-yield
Can any of the company-specific risk be diversified away by investing in both Prudential High and Janus High-yield 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 Prudential High and Janus High-yield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential High Yield and Janus High Yield Fund, you can compare the effects of market volatilities on Prudential High and Janus High-yield 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 Prudential High with a short position of Janus High-yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential High and Janus High-yield.
Diversification Opportunities for Prudential High and Janus High-yield
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Prudential and Janus is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Prudential High Yield and Janus High Yield Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus High Yield and Prudential High 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 Prudential High Yield are associated (or correlated) with Janus High-yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus High Yield has no effect on the direction of Prudential High i.e., Prudential High and Janus High-yield go up and down completely randomly.
Pair Corralation between Prudential High and Janus High-yield
Assuming the 90 days horizon Prudential High is expected to generate 1.42 times less return on investment than Janus High-yield. But when comparing it to its historical volatility, Prudential High Yield is 1.46 times less risky than Janus High-yield. It trades about 0.45 of its potential returns per unit of risk. Janus High Yield Fund is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 685.00 in Janus High Yield Fund on April 6, 2025 and sell it today you would earn a total of 56.00 from holding Janus High Yield Fund or generate 8.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential High Yield vs. Janus High Yield Fund
Performance |
| Timeline |
| Prudential High Yield |
| Janus High Yield |
Prudential High and Janus High-yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential High and Janus High-yield
The main advantage of trading using opposite Prudential High and Janus High-yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential High position performs unexpectedly, Janus High-yield 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 High-yield will offset losses from the drop in Janus High-yield's long position.| Prudential High vs. Lord Abbett Diversified | Prudential High vs. Victory Diversified Stock | Prudential High vs. Elfun Diversified Fund | Prudential High vs. Tiaa Cref Small Cap Equity |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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