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
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Salient and Salient is 0.24. 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 under-perform the Salient Select. But the mutual fund apears to be less risky and, when comparing its historical volatility, Salient Tactical Plus is 1.26 times less risky than Salient Select. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Salient Select Income is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,531 in Salient Select Income on September 3, 2024 and sell it today you would earn a total of 363.00 from holding Salient Select Income or generate 23.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very 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. Gold And Precious | Salient Tactical vs. Franklin Gold Precious | Salient Tactical vs. Europac Gold Fund | Salient Tactical vs. James Balanced Golden |
| Salient Select vs. Cohen Steers Prfrd | Salient Select vs. Cohen Steers Preferred | Salient Select vs. Preferred Securities Fund | Salient Select vs. Aquagold International |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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