Correlation Between Bbh Intermediate and Salient Tactical

Can any of the company-specific risk be diversified away by investing in both Bbh Intermediate 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 Bbh Intermediate and Salient Tactical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bbh Intermediate Municipal and Salient Tactical Plus, you can compare the effects of market volatilities on Bbh Intermediate 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 Bbh Intermediate with a short position of Salient Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bbh Intermediate and Salient Tactical.

Diversification Opportunities for Bbh Intermediate and Salient Tactical

0.73

Correlation Coefficient

Bbh Intermediate  Salient Tactical

Poor diversification

The 3 months correlation between Bbh and Salient is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Bbh Intermediate Municipal and Salient Tactical Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salient Tactical Plus and Bbh Intermediate 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 Bbh Intermediate Municipal 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 Plus has no effect on the direction of Bbh Intermediate i.e., Bbh Intermediate and Salient Tactical go up and down completely randomly.

Pair Corralation between Bbh Intermediate and Salient Tactical

Assuming the 90 days horizon Bbh Intermediate is expected to generate 2.0 times less return on investment than Salient Tactical. In addition to that, Bbh Intermediate is 1.04 times more volatile than Salient Tactical Plus. It trades about 0.01 of its total potential returns per unit of risk. Salient Tactical Plus is currently generating about 0.02 per unit of volatility. If you would invest  1,012  in Salient Tactical Plus on December 29, 2024 and sell it today you would earn a total of  1.00  from holding Salient Tactical Plus or generate 0.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	47.54%
Values	Daily Returns

Bbh Intermediate Municipal  vs.  Salient Tactical Plus

Bbh Intermediate Mun

Risk-Adjusted Performance

Weak

Over the last 90 days Bbh Intermediate Municipal has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Bbh Intermediate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Salient Tactical Plus

Risk-Adjusted Performance

Weak

Over the last 90 days Salient Tactical Plus has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Salient Tactical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bbh Intermediate and Salient Tactical

The main advantage of trading using opposite Bbh Intermediate and Salient Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bbh Intermediate 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.

The idea behind Bbh Intermediate Municipal and Salient Tactical Plus pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Money Managers module to screen money managers from public funds and ETFs managed around the world.