Correlation Between Salient International and Salient Tactical
Can any of the company-specific risk be diversified away by investing in both Salient International 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 Salient International and Salient Tactical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salient International Real and Salient Tactical Plus, you can compare the effects of market volatilities on Salient International 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 Salient International with a short position of Salient Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salient International and Salient Tactical.
Diversification Opportunities for Salient International and Salient Tactical
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Salient and Salient is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Salient International Real 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 Salient International 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 International Real 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 Salient International i.e., Salient International and Salient Tactical go up and down completely randomly.
Pair Corralation between Salient International and Salient Tactical
Assuming the 90 days horizon Salient International Real is expected to generate 2.06 times more return on investment than Salient Tactical. However, Salient International is 2.06 times more volatile than Salient Tactical Plus. It trades about 0.03 of its potential returns per unit of risk. Salient Tactical Plus is currently generating about -0.01 per unit of risk. If you would invest 1,133 in Salient International Real on August 26, 2024 and sell it today you would earn a total of 169.00 from holding Salient International Real or generate 14.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salient International Real vs. Salient Tactical Plus
Performance |
| Timeline |
| Salient International |
| Salient Tactical Plus |
Salient International and Salient Tactical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salient International and Salient Tactical
The main advantage of trading using opposite Salient International and Salient Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salient International 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.| Salient International vs. Salient Tactical Plus | Salient International vs. Salient Tactical Plus | Salient International vs. Salient Tactical Growth | Salient International vs. Salient Tactical Growth |
| 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |