Correlation Between Old Westbury and Salient Tactical
Can any of the company-specific risk be diversified away by investing in both Old Westbury 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 Old Westbury and Salient Tactical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Westbury Large and Salient Tactical Plus, you can compare the effects of market volatilities on Old Westbury 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 Old Westbury with a short position of Salient Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Salient Tactical.
Diversification Opportunities for Old Westbury and Salient Tactical
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Old and Salient is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Large 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 Old Westbury 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 Old Westbury Large 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 Old Westbury i.e., Old Westbury and Salient Tactical go up and down completely randomly.
Pair Corralation between Old Westbury and Salient Tactical
Assuming the 90 days horizon Old Westbury Large is expected to generate 1.45 times more return on investment than Salient Tactical. However, Old Westbury is 1.45 times more volatile than Salient Tactical Plus. It trades about 0.09 of its potential returns per unit of risk. Salient Tactical Plus is currently generating about -0.13 per unit of risk. If you would invest 2,132 in Old Westbury Large on September 13, 2024 and sell it today you would earn a total of 19.00 from holding Old Westbury Large or generate 0.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Westbury Large vs. Salient Tactical Plus
Performance |
| Timeline |
| Old Westbury Large |
| Salient Tactical Plus |
Old Westbury and Salient Tactical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Salient Tactical
The main advantage of trading using opposite Old Westbury and Salient Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury 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.| Old Westbury vs. Prudential Government Income | Old Westbury vs. Franklin Adjustable Government | Old Westbury vs. Payden Government Fund | Old Westbury vs. Short Term Government Fund |
| 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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