Correlation Between Financials Ultrasector and Salient Select
Can any of the company-specific risk be diversified away by investing in both Financials Ultrasector and Salient Select 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 Financials Ultrasector and Salient Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Financials Ultrasector Profund and Salient Select Income, you can compare the effects of market volatilities on Financials Ultrasector and Salient Select 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 Financials Ultrasector with a short position of Salient Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financials Ultrasector and Salient Select.
Diversification Opportunities for Financials Ultrasector and Salient Select
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Financials and Salient is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Financials Ultrasector Profund and Salient Select Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salient Select Income and Financials Ultrasector 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 Financials Ultrasector Profund are associated (or correlated) with Salient Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salient Select Income has no effect on the direction of Financials Ultrasector i.e., Financials Ultrasector and Salient Select go up and down completely randomly.
Pair Corralation between Financials Ultrasector and Salient Select
Assuming the 90 days horizon Financials Ultrasector Profund is expected to generate 4.24 times more return on investment than Salient Select. However, Financials Ultrasector is 4.24 times more volatile than Salient Select Income. It trades about 0.17 of its potential returns per unit of risk. Salient Select Income is currently generating about 0.1 per unit of risk. If you would invest 3,749 in Financials Ultrasector Profund on September 12, 2024 and sell it today you would earn a total of 664.00 from holding Financials Ultrasector Profund or generate 17.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Financials Ultrasector Profund vs. Salient Select Income
Performance |
| Timeline |
| Financials Ultrasector |
| Salient Select Income |
Financials Ultrasector and Salient Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Financials Ultrasector and Salient Select
The main advantage of trading using opposite Financials Ultrasector and Salient Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financials Ultrasector position performs unexpectedly, Salient Select 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 Salient Select will offset losses from the drop in Salient Select's long position.| Financials Ultrasector vs. Volumetric Fund Volumetric | Financials Ultrasector vs. L Abbett Fundamental | Financials Ultrasector vs. Qs Growth Fund | Financials Ultrasector vs. Ab Small Cap |
| Salient Select vs. Morningstar Defensive Bond | Salient Select vs. The National Tax Free | Salient Select vs. Alliancebernstein Bond | Salient Select vs. Ambrus Core Bond |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |