Correlation Between Salient Tactical and Salient Select
Can any of the company-specific risk be diversified away by investing in both Salient Tactical 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 Salient Tactical and Salient Select 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 Salient Select Income, you can compare the effects of market volatilities on Salient Tactical 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 Salient Tactical with a short position of Salient Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salient Tactical and Salient Select.
Diversification Opportunities for Salient Tactical and Salient Select
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Salient and Salient is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Salient Tactical Growth 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 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 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 Salient Tactical i.e., Salient Tactical and Salient Select go up and down completely randomly.
Pair Corralation between Salient Tactical and Salient Select
Assuming the 90 days horizon Salient Tactical is expected to generate 2.48 times less return on investment than Salient Select. But when comparing it to its historical volatility, Salient Tactical Growth is 2.01 times less risky than Salient Select. It trades about 0.07 of its potential returns per unit of risk. Salient Select Income is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,549 in Salient Select Income on August 30, 2024 and sell it today you would earn a total of 406.00 from holding Salient Select Income or generate 26.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salient Tactical Growth vs. Salient Select Income
Performance |
| Timeline |
| Salient Tactical Growth |
| Salient Select Income |
Salient Tactical and Salient Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salient Tactical and Salient Select
The main advantage of trading using opposite Salient Tactical and Salient Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salient Tactical 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.| Salient Tactical vs. Salient Select Income | Salient Tactical vs. Salient Mlp Energy | Salient Tactical vs. Lazard Equity Centrated | Salient Tactical vs. Marketfield Fund Marketfield |
| Salient Select vs. Cohen Steers Prfrd | Salient Select vs. Cohen Steers Preferd | Salient Select vs. Cohen Steers Prefrd | Salient Select vs. Cohen Steers Preferred |
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.
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