Correlation Between Salient Tactical and Jpmorgan Hedged
Can any of the company-specific risk be diversified away by investing in both Salient Tactical and Jpmorgan Hedged 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 Tactical and Jpmorgan Hedged into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salient Tactical Plus and Jpmorgan Hedged Equity, you can compare the effects of market volatilities on Salient Tactical and Jpmorgan Hedged 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 Tactical with a short position of Jpmorgan Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salient Tactical and Jpmorgan Hedged.
Diversification Opportunities for Salient Tactical and Jpmorgan Hedged
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SALIENT and Jpmorgan is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Salient Tactical Plus and Jpmorgan Hedged Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Hedged Equity and Salient Tactical 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 Tactical Plus are associated (or correlated) with Jpmorgan Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Hedged Equity has no effect on the direction of Salient Tactical i.e., Salient Tactical and Jpmorgan Hedged go up and down completely randomly.
Pair Corralation between Salient Tactical and Jpmorgan Hedged
Assuming the 90 days horizon Salient Tactical is expected to generate 4.23 times less return on investment than Jpmorgan Hedged. But when comparing it to its historical volatility, Salient Tactical Plus is 1.16 times less risky than Jpmorgan Hedged. It trades about 0.04 of its potential returns per unit of risk. Jpmorgan Hedged Equity is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 2,979 in Jpmorgan Hedged Equity on September 1, 2024 and sell it today you would earn a total of 358.00 from holding Jpmorgan Hedged Equity or generate 12.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salient Tactical Plus vs. Jpmorgan Hedged Equity
Performance |
| Timeline |
| Salient Tactical Plus |
| Jpmorgan Hedged Equity |
Salient Tactical and Jpmorgan Hedged Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salient Tactical and Jpmorgan Hedged
The main advantage of trading using opposite Salient Tactical and Jpmorgan Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salient Tactical position performs unexpectedly, Jpmorgan Hedged 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 Jpmorgan Hedged will offset losses from the drop in Jpmorgan Hedged's long position.| Salient Tactical vs. Salient Tactical Plus | Salient Tactical vs. Salient Tactical Growth | Salient Tactical vs. Salient Tactical Growth | Salient Tactical vs. Salient Tactical Growth |
| Jpmorgan Hedged vs. Jpmorgan Hedged Equity | Jpmorgan Hedged vs. Jpmorgan Hedged Equity | Jpmorgan Hedged vs. Jpmorgan Hedged Equity | Jpmorgan Hedged vs. Loomis Sayles Global |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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