Correlation Between Angel Oak and Embark Commodity
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Embark Commodity 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 Angel Oak and Embark Commodity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Angel Oak Multi Strategy and Embark Commodity Strategy, you can compare the effects of market volatilities on Angel Oak and Embark Commodity 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 Angel Oak with a short position of Embark Commodity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Embark Commodity.
Diversification Opportunities for Angel Oak and Embark Commodity
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Angel and Embark is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Multi Strategy and Embark Commodity Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embark Commodity Strategy and Angel Oak 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 Angel Oak Multi Strategy are associated (or correlated) with Embark Commodity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embark Commodity Strategy has no effect on the direction of Angel Oak i.e., Angel Oak and Embark Commodity go up and down completely randomly.
Pair Corralation between Angel Oak and Embark Commodity
Assuming the 90 days horizon Angel Oak is expected to generate 18.12 times less return on investment than Embark Commodity. But when comparing it to its historical volatility, Angel Oak Multi Strategy is 4.49 times less risky than Embark Commodity. It trades about 0.07 of its potential returns per unit of risk. Embark Commodity Strategy is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,014 in Embark Commodity Strategy on November 4, 2024 and sell it today you would earn a total of 44.00 from holding Embark Commodity Strategy or generate 4.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Angel Oak Multi Strategy vs. Embark Commodity Strategy
Performance |
| Timeline |
| Angel Oak Multi |
| Embark Commodity Strategy |
Angel Oak and Embark Commodity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Embark Commodity
The main advantage of trading using opposite Angel Oak and Embark Commodity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Embark Commodity 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 Embark Commodity will offset losses from the drop in Embark Commodity's long position.| Angel Oak vs. Rbc Emerging Markets | Angel Oak vs. Calvert Emerging Markets | Angel Oak vs. Templeton Emerging Markets | Angel Oak vs. Transamerica Emerging Markets |
| Embark Commodity vs. Aqr Diversified Arbitrage | Embark Commodity vs. Wilmington Diversified Income | Embark Commodity vs. Davenport Small Cap | Embark Commodity vs. Wells Fargo Diversified |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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