Correlation Between Evolving Systems and Salient Investment

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

By analyzing existing cross correlation between Evolving Systems and Salient Investment Grade, you can compare the effects of market volatilities on Evolving Systems and Salient Investment 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 Evolving Systems with a short position of Salient Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolving Systems and Salient Investment.

Diversification Opportunities for Evolving Systems and Salient Investment

0.0

Correlation Coefficient

Evolving Systems  Salient Investment

Pay attention - limited upside

The 3 months correlation between Evolving and Salient is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Evolving Systems and Salient Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salient Investment Grade and Evolving Systems 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 Evolving Systems are associated (or correlated) with Salient Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salient Investment Grade has no effect on the direction of Evolving Systems i.e., Evolving Systems and Salient Investment go up and down completely randomly.

Pair Corralation between Evolving Systems and Salient Investment

If you would invest (100.00) in Evolving Systems on December 30, 2024 and sell it today you would earn a total of  100.00  from holding Evolving Systems or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Evolving Systems  vs.  Salient Investment Grade

Evolving Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days Evolving Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Evolving Systems is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Salient Investment Grade

Risk-Adjusted Performance

Very Weak

Over the last 90 days Salient Investment Grade has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Evolving Systems and Salient Investment

The main advantage of trading using opposite Evolving Systems and Salient Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolving Systems position performs unexpectedly, Salient Investment 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 Investment will offset losses from the drop in Salient Investment's long position.

The idea behind Evolving Systems and Salient Investment Grade 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.