Correlation Between Angel Oak and Prudential Emerging
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Prudential Emerging 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 Prudential Emerging 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 Prudential Emerging Markets, you can compare the effects of market volatilities on Angel Oak and Prudential Emerging 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 Prudential Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Prudential Emerging.
Diversification Opportunities for Angel Oak and Prudential Emerging
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Angel and Prudential is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Multi Strategy and Prudential Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Emerging 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 Prudential Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Emerging has no effect on the direction of Angel Oak i.e., Angel Oak and Prudential Emerging go up and down completely randomly.
Pair Corralation between Angel Oak and Prudential Emerging
Assuming the 90 days horizon Angel Oak is expected to generate 1.04 times less return on investment than Prudential Emerging. But when comparing it to its historical volatility, Angel Oak Multi Strategy is 2.27 times less risky than Prudential Emerging. It trades about 0.11 of its potential returns per unit of risk. Prudential Emerging Markets is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 411.00 in Prudential Emerging Markets on September 2, 2024 and sell it today you would earn a total of 45.00 from holding Prudential Emerging Markets or generate 10.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Angel Oak Multi Strategy vs. Prudential Emerging Markets
Performance |
| Timeline |
| Angel Oak Multi |
| Prudential Emerging |
Angel Oak and Prudential Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Prudential Emerging
The main advantage of trading using opposite Angel Oak and Prudential Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Prudential Emerging 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 Prudential Emerging will offset losses from the drop in Prudential Emerging's long position.| Angel Oak vs. Calvert Developed Market | Angel Oak vs. Origin Emerging Markets | Angel Oak vs. Aqr Sustainable Long Short | Angel Oak vs. Vanguard Developed Markets |
| Prudential Emerging vs. Angel Oak Multi Strategy | Prudential Emerging vs. Barings Emerging Markets | Prudential Emerging vs. Pnc Emerging Markets | Prudential Emerging vs. Ashmore Emerging Markets |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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