Correlation Between Scharf Global and Salient International
Can any of the company-specific risk be diversified away by investing in both Scharf Global and Salient International 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 Scharf Global and Salient International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scharf Global Opportunity and Salient International Real, you can compare the effects of market volatilities on Scharf Global and Salient International 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 Scharf Global with a short position of Salient International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Global and Salient International.
Diversification Opportunities for Scharf Global and Salient International
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Scharf and Salient is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Global Opportunity and Salient International Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salient International and Scharf Global 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 Scharf Global Opportunity are associated (or correlated) with Salient International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salient International has no effect on the direction of Scharf Global i.e., Scharf Global and Salient International go up and down completely randomly.
Pair Corralation between Scharf Global and Salient International
Assuming the 90 days horizon Scharf Global Opportunity is expected to generate 0.86 times more return on investment than Salient International. However, Scharf Global Opportunity is 1.17 times less risky than Salient International. It trades about 0.0 of its potential returns per unit of risk. Salient International Real is currently generating about -0.06 per unit of risk. If you would invest 3,724 in Scharf Global Opportunity on September 13, 2024 and sell it today you would lose (1.00) from holding Scharf Global Opportunity or give up 0.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scharf Global Opportunity vs. Salient International Real
Performance |
| Timeline |
| Scharf Global Opportunity |
| Salient International |
Scharf Global and Salient International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Global and Salient International
The main advantage of trading using opposite Scharf Global and Salient International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Global position performs unexpectedly, Salient International 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 International will offset losses from the drop in Salient International's long position.| Scharf Global vs. Invesco Energy Fund | Scharf Global vs. Goehring Rozencwajg Resources | Scharf Global vs. Oil Gas Ultrasector | Scharf Global vs. Jennison Natural Resources |
| Salient International vs. Salient Tactical Plus | Salient International vs. Salient Tactical Plus | Salient International vs. Salient Tactical Plus | Salient International vs. Salient Tactical Plus |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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