Correlation Between Smallcap Growth and Salient Tactical
Can any of the company-specific risk be diversified away by investing in both Smallcap Growth 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 Smallcap Growth and Salient Tactical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smallcap Growth Fund and Salient Tactical Growth, you can compare the effects of market volatilities on Smallcap Growth 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 Smallcap Growth with a short position of Salient Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smallcap Growth and Salient Tactical.
Diversification Opportunities for Smallcap Growth and Salient Tactical
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Smallcap and Salient is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Smallcap Growth Fund and Salient Tactical Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salient Tactical Growth and Smallcap Growth 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 Smallcap Growth Fund 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 Growth has no effect on the direction of Smallcap Growth i.e., Smallcap Growth and Salient Tactical go up and down completely randomly.
Pair Corralation between Smallcap Growth and Salient Tactical
Assuming the 90 days horizon Smallcap Growth Fund is expected to generate 1.84 times more return on investment than Salient Tactical. However, Smallcap Growth is 1.84 times more volatile than Salient Tactical Growth. It trades about 0.06 of its potential returns per unit of risk. Salient Tactical Growth is currently generating about 0.11 per unit of risk. If you would invest 1,195 in Smallcap Growth Fund on September 14, 2024 and sell it today you would earn a total of 491.00 from holding Smallcap Growth Fund or generate 41.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smallcap Growth Fund vs. Salient Tactical Growth
Performance |
| Timeline |
| Smallcap Growth |
| Salient Tactical Growth |
Smallcap Growth and Salient Tactical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smallcap Growth and Salient Tactical
The main advantage of trading using opposite Smallcap Growth and Salient Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smallcap Growth 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.| Smallcap Growth vs. Eip Growth And | Smallcap Growth vs. Franklin Growth Opportunities | Smallcap Growth vs. Rational Defensive Growth | Smallcap Growth vs. Praxis Growth Index |
| Salient Tactical vs. Ftfa Franklin Templeton Growth | Salient Tactical vs. Smallcap Growth Fund | Salient Tactical vs. Franklin Growth Opportunities | Salient Tactical vs. Tfa Alphagen 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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