Correlation Between Angel Oak and Wells Fargo
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Wells Fargo 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 Wells Fargo 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 Wells Fargo Mon, you can compare the effects of market volatilities on Angel Oak and Wells Fargo 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 Wells Fargo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Wells Fargo.
Diversification Opportunities for Angel Oak and Wells Fargo
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Angel and WELLS is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Multi Strategy and Wells Fargo Mon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wells Fargo Mon 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 Wells Fargo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wells Fargo Mon has no effect on the direction of Angel Oak i.e., Angel Oak and Wells Fargo go up and down completely randomly.
Pair Corralation between Angel Oak and Wells Fargo
Assuming the 90 days horizon Angel Oak is expected to generate 2.66 times less return on investment than Wells Fargo. But when comparing it to its historical volatility, Angel Oak Multi Strategy is 5.34 times less risky than Wells Fargo. It trades about 0.1 of its potential returns per unit of risk. Wells Fargo Mon is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,660 in Wells Fargo Mon on August 30, 2024 and sell it today you would earn a total of 462.00 from holding Wells Fargo Mon or generate 27.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Angel Oak Multi Strategy vs. Wells Fargo Mon
Performance |
| Timeline |
| Angel Oak Multi |
| Wells Fargo Mon |
Angel Oak and Wells Fargo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Wells Fargo
The main advantage of trading using opposite Angel Oak and Wells Fargo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Wells Fargo 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 Wells Fargo will offset losses from the drop in Wells Fargo's long position.| Angel Oak vs. Pimco Income Fund | Angel Oak vs. HUMANA INC | Angel Oak vs. Aquagold International | Angel Oak vs. Barloworld Ltd ADR |
| Wells Fargo vs. Federated Emerging Market | Wells Fargo vs. Angel Oak Multi Strategy | Wells Fargo vs. Ep Emerging Markets | Wells Fargo 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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