Correlation Between Emerging Markets and Angel Oak
Can any of the company-specific risk be diversified away by investing in both Emerging Markets and Angel Oak 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 Emerging Markets and Angel Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerging Markets Debt and Angel Oak Ultrashort, you can compare the effects of market volatilities on Emerging Markets and Angel Oak 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 Emerging Markets with a short position of Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Markets and Angel Oak.
Diversification Opportunities for Emerging Markets and Angel Oak
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Emerging and Angel is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Markets Debt and Angel Oak Ultrashort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angel Oak Ultrashort and Emerging Markets 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 Emerging Markets Debt are associated (or correlated) with Angel Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Angel Oak Ultrashort has no effect on the direction of Emerging Markets i.e., Emerging Markets and Angel Oak go up and down completely randomly.
Pair Corralation between Emerging Markets and Angel Oak
Assuming the 90 days horizon Emerging Markets Debt is expected to generate 2.71 times more return on investment than Angel Oak. However, Emerging Markets is 2.71 times more volatile than Angel Oak Ultrashort. It trades about 0.09 of its potential returns per unit of risk. Angel Oak Ultrashort is currently generating about 0.23 per unit of risk. If you would invest 828.00 in Emerging Markets Debt on September 14, 2024 and sell it today you would earn a total of 60.00 from holding Emerging Markets Debt or generate 7.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerging Markets Debt vs. Angel Oak Ultrashort
Performance |
| Timeline |
| Emerging Markets Debt |
| Angel Oak Ultrashort |
Emerging Markets and Angel Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Markets and Angel Oak
The main advantage of trading using opposite Emerging Markets and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Markets position performs unexpectedly, Angel Oak 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 Angel Oak will offset losses from the drop in Angel Oak's long position.| Emerging Markets vs. Barings Active Short | Emerging Markets vs. Prudential Short Duration | Emerging Markets vs. Blackrock Short Term Inflat Protected | Emerging Markets vs. Angel Oak Ultrashort |
| Angel Oak vs. Ftfa Franklin Templeton Growth | Angel Oak vs. Vy Baron Growth | Angel Oak vs. Qs Defensive Growth | Angel Oak vs. T Rowe Price |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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