Correlation Between Salient Tactical and Salient Select
Can any of the company-specific risk be diversified away by investing in both Salient Tactical and Salient Select 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 Salient Select 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 Salient Select Income, you can compare the effects of market volatilities on Salient Tactical and Salient Select 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 Salient Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salient Tactical and Salient Select.
Diversification Opportunities for Salient Tactical and Salient Select
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Salient and Salient is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Salient Tactical Plus and Salient Select Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salient Select Income 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 Salient Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salient Select Income has no effect on the direction of Salient Tactical i.e., Salient Tactical and Salient Select go up and down completely randomly.
Pair Corralation between Salient Tactical and Salient Select
Assuming the 90 days horizon Salient Tactical Plus is expected to generate 0.42 times more return on investment than Salient Select. However, Salient Tactical Plus is 2.38 times less risky than Salient Select. It trades about -0.05 of its potential returns per unit of risk. Salient Select Income is currently generating about -0.05 per unit of risk. If you would invest 1,019 in Salient Tactical Plus on October 22, 2024 and sell it today you would lose (2.00) from holding Salient Tactical Plus or give up 0.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salient Tactical Plus vs. Salient Select Income
Performance |
| Timeline |
| Salient Tactical Plus |
| Salient Select Income |
Salient Tactical and Salient Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salient Tactical and Salient Select
The main advantage of trading using opposite Salient Tactical and Salient Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salient Tactical position performs unexpectedly, Salient Select 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 Select will offset losses from the drop in Salient Select's long position.| Salient Tactical vs. Aqr Sustainable Long Short | Salient Tactical vs. Investec Emerging Markets | Salient Tactical vs. Vanguard Emerging Markets | Salient Tactical vs. Jhancock Diversified Macro |
| Salient Select vs. Advent Claymore Convertible | Salient Select vs. Allianzgi Convertible Income | Salient Select vs. Rationalpier 88 Convertible | Salient Select vs. Absolute Convertible Arbitrage |
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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