Correlation Between Salient Select and James Alpha
Can any of the company-specific risk be diversified away by investing in both Salient Select and James Alpha 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 Select and James Alpha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salient Select Income and James Alpha Global, you can compare the effects of market volatilities on Salient Select and James Alpha 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 Select with a short position of James Alpha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salient Select and James Alpha.
Diversification Opportunities for Salient Select and James Alpha
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Salient and James is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Salient Select Income and James Alpha Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on James Alpha Global and Salient Select 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 Select Income are associated (or correlated) with James Alpha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of James Alpha Global has no effect on the direction of Salient Select i.e., Salient Select and James Alpha go up and down completely randomly.
Pair Corralation between Salient Select and James Alpha
Assuming the 90 days horizon Salient Select Income is expected to generate 0.59 times more return on investment than James Alpha. However, Salient Select Income is 1.7 times less risky than James Alpha. It trades about 0.06 of its potential returns per unit of risk. James Alpha Global is currently generating about 0.03 per unit of risk. If you would invest 1,522 in Salient Select Income on November 28, 2024 and sell it today you would earn a total of 249.00 from holding Salient Select Income or generate 16.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.09% |
| Values | Daily Returns |
Salient Select Income vs. James Alpha Global
Performance |
| Timeline |
| Salient Select Income |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| James Alpha Global |
Salient Select and James Alpha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salient Select and James Alpha
The main advantage of trading using opposite Salient Select and James Alpha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salient Select position performs unexpectedly, James Alpha 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 James Alpha will offset losses from the drop in James Alpha's long position.| Salient Select vs. Salient Select Income | Salient Select vs. Ivy High Income | Salient Select vs. Salient Select Income | Salient Select vs. Salient International Real |
| James Alpha vs. James Alpha Global | James Alpha vs. James Alpha Global | James Alpha vs. James Alpha Structured | James Alpha vs. Global Opportunity Portfolio |
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 CEOs Directory module to screen CEOs from public companies around the world.
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