Correlation Between Salient Tactical and Thompson Largecap
Can any of the company-specific risk be diversified away by investing in both Salient Tactical and Thompson Largecap 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 Thompson Largecap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salient Tactical Growth and Thompson Largecap Fund, you can compare the effects of market volatilities on Salient Tactical and Thompson Largecap 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 Thompson Largecap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salient Tactical and Thompson Largecap.
Diversification Opportunities for Salient Tactical and Thompson Largecap
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Salient and Thompson is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Salient Tactical Growth and Thompson Largecap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thompson Largecap 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 Growth are associated (or correlated) with Thompson Largecap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thompson Largecap has no effect on the direction of Salient Tactical i.e., Salient Tactical and Thompson Largecap go up and down completely randomly.
Pair Corralation between Salient Tactical and Thompson Largecap
Assuming the 90 days horizon Salient Tactical is expected to generate 1.82 times less return on investment than Thompson Largecap. But when comparing it to its historical volatility, Salient Tactical Growth is 1.38 times less risky than Thompson Largecap. It trades about 0.14 of its potential returns per unit of risk. Thompson Largecap Fund is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 11,151 in Thompson Largecap Fund on August 30, 2025 and sell it today you would earn a total of 1,059 from holding Thompson Largecap Fund or generate 9.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salient Tactical Growth vs. Thompson Largecap Fund
Performance |
| Timeline |
| Salient Tactical Growth |
| Thompson Largecap |
Salient Tactical and Thompson Largecap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salient Tactical and Thompson Largecap
The main advantage of trading using opposite Salient Tactical and Thompson Largecap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salient Tactical position performs unexpectedly, Thompson Largecap 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 Thompson Largecap will offset losses from the drop in Thompson Largecap's long position.| Salient Tactical vs. Salient Tactical Plus | Salient Tactical vs. Salient Tactical Plus | Salient Tactical vs. Salient Tactical Plus | Salient Tactical vs. Salient Tactical Growth |
| Thompson Largecap vs. Equalize Community Development | Thompson Largecap vs. Ab Impact Municipal | Thompson Largecap vs. Oklahoma Municipal Fund | Thompson Largecap vs. Fidelity California Municipal |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Global Correlations Find global opportunities by holding instruments from different markets |