Correlation Between Salient Tactical and Target Retirement
Can any of the company-specific risk be diversified away by investing in both Salient Tactical and Target Retirement 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 Salient Tactical and Target Retirement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salient Tactical Growth and Target Retirement 2040, you can compare the effects of market volatilities on Salient Tactical and Target Retirement 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 Salient Tactical with a short position of Target Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salient Tactical and Target Retirement.
Diversification Opportunities for Salient Tactical and Target Retirement
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Salient and Target is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Salient Tactical Growth and Target Retirement 2040 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target Retirement 2040 and Salient Tactical 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 Salient Tactical Growth are associated (or correlated) with Target Retirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target Retirement 2040 has no effect on the direction of Salient Tactical i.e., Salient Tactical and Target Retirement go up and down completely randomly.
Pair Corralation between Salient Tactical and Target Retirement
Assuming the 90 days horizon Salient Tactical Growth is expected to under-perform the Target Retirement. In addition to that, Salient Tactical is 1.23 times more volatile than Target Retirement 2040. It trades about -0.08 of its total potential returns per unit of risk. Target Retirement 2040 is currently generating about -0.1 per unit of volatility. If you would invest 1,307 in Target Retirement 2040 on January 13, 2025 and sell it today you would lose (52.00) from holding Target Retirement 2040 or give up 3.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salient Tactical Growth vs. Target Retirement 2040
Performance |
| Timeline |
| Salient Tactical Growth |
| Target Retirement 2040 |
Salient Tactical and Target Retirement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salient Tactical and Target Retirement
The main advantage of trading using opposite Salient Tactical and Target Retirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salient Tactical position performs unexpectedly, Target Retirement 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 Target Retirement will offset losses from the drop in Target Retirement's long position.| Salient Tactical vs. Salient Tactical Plus | Salient Tactical vs. Salient Tactical Plus | Salient Tactical vs. Salient Tactical Growth | Salient Tactical vs. Salient Select Income |
| Target Retirement vs. Ab Centrated Growth | Target Retirement vs. Alpskotak India Growth | Target Retirement vs. Ftfa Franklin Templeton Growth | Target Retirement vs. Nuveen Santa Barbara |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |