Correlation Between James Balanced and Salient Tactical
Can any of the company-specific risk be diversified away by investing in both James Balanced and Salient Tactical 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 James Balanced and Salient Tactical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between James Balanced Golden and Salient Tactical Plus, you can compare the effects of market volatilities on James Balanced and Salient Tactical 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 James Balanced with a short position of Salient Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of James Balanced and Salient Tactical.
Diversification Opportunities for James Balanced and Salient Tactical
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between James and Salient is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding James Balanced Golden and Salient Tactical Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salient Tactical Plus and James Balanced 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 James Balanced Golden are associated (or correlated) with Salient Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salient Tactical Plus has no effect on the direction of James Balanced i.e., James Balanced and Salient Tactical go up and down completely randomly.
Pair Corralation between James Balanced and Salient Tactical
Assuming the 90 days horizon James Balanced Golden is expected to generate 0.8 times more return on investment than Salient Tactical. However, James Balanced Golden is 1.25 times less risky than Salient Tactical. It trades about 0.36 of its potential returns per unit of risk. Salient Tactical Plus is currently generating about 0.23 per unit of risk. If you would invest 2,264 in James Balanced Golden on September 4, 2024 and sell it today you would earn a total of 68.00 from holding James Balanced Golden or generate 3.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
James Balanced Golden vs. Salient Tactical Plus
Performance |
| Timeline |
| James Balanced Golden |
| Salient Tactical Plus |
James Balanced and Salient Tactical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with James Balanced and Salient Tactical
The main advantage of trading using opposite James Balanced and Salient Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if James Balanced position performs unexpectedly, Salient Tactical 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 Tactical will offset losses from the drop in Salient Tactical's long position.| James Balanced vs. Permanent Portfolio Class | James Balanced vs. Berwyn Income Fund | James Balanced vs. Large Cap Fund | James Balanced vs. Westcore Plus Bond |
| Salient Tactical vs. Salient Tactical Plus | Salient Tactical vs. Salient Tactical Plus | Salient Tactical vs. Salient Tactical Growth | Salient Tactical vs. Salient Tactical Growth |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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