Correlation Between Angel Oak and Madison Moderate
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Madison Moderate 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 Madison Moderate 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 Madison Moderate Allocation, you can compare the effects of market volatilities on Angel Oak and Madison Moderate 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 Madison Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Madison Moderate.
Diversification Opportunities for Angel Oak and Madison Moderate
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Angel and Madison is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Multi Strategy and Madison Moderate Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Madison Moderate All 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 Madison Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Madison Moderate All has no effect on the direction of Angel Oak i.e., Angel Oak and Madison Moderate go up and down completely randomly.
Pair Corralation between Angel Oak and Madison Moderate
Assuming the 90 days horizon Angel Oak is expected to generate 7.11 times less return on investment than Madison Moderate. But when comparing it to its historical volatility, Angel Oak Multi Strategy is 2.71 times less risky than Madison Moderate. It trades about 0.07 of its potential returns per unit of risk. Madison Moderate Allocation is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,070 in Madison Moderate Allocation on November 4, 2024 and sell it today you would earn a total of 18.00 from holding Madison Moderate Allocation or generate 1.68% 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. Madison Moderate Allocation
Performance |
| Timeline |
| Angel Oak Multi |
| Madison Moderate All |
Angel Oak and Madison Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Madison Moderate
The main advantage of trading using opposite Angel Oak and Madison Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Madison Moderate 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 Madison Moderate will offset losses from the drop in Madison Moderate'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 |
| Madison Moderate vs. Putnam Convertible Securities | Madison Moderate vs. Fidelity Sai Convertible | Madison Moderate vs. Virtus Convertible | Madison Moderate vs. Advent Claymore Convertible |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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