Correlation Between Angel Oak and Saat Defensive
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Saat Defensive 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 Saat Defensive 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 Saat Defensive Strategy, you can compare the effects of market volatilities on Angel Oak and Saat Defensive 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 Saat Defensive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Saat Defensive.
Diversification Opportunities for Angel Oak and Saat Defensive
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Angel and Saat is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Multi Strategy and Saat Defensive Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saat Defensive 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 Saat Defensive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saat Defensive Strategy has no effect on the direction of Angel Oak i.e., Angel Oak and Saat Defensive go up and down completely randomly.
Pair Corralation between Angel Oak and Saat Defensive
Assuming the 90 days horizon Angel Oak Multi Strategy is expected to generate 1.42 times more return on investment than Saat Defensive. However, Angel Oak is 1.42 times more volatile than Saat Defensive Strategy. It trades about 0.11 of its potential returns per unit of risk. Saat Defensive Strategy is currently generating about 0.14 per unit of risk. If you would invest 770.00 in Angel Oak Multi Strategy on November 2, 2024 and sell it today you would earn a total of 83.00 from holding Angel Oak Multi Strategy or generate 10.78% 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. Saat Defensive Strategy
Performance |
| Timeline |
| Angel Oak Multi |
| Saat Defensive Strategy |
Angel Oak and Saat Defensive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Saat Defensive
The main advantage of trading using opposite Angel Oak and Saat Defensive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Saat Defensive 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 Saat Defensive will offset losses from the drop in Saat Defensive's long position.| Angel Oak vs. Great West Loomis Sayles | Angel Oak vs. Ab Small Cap | Angel Oak vs. Small Cap Value Profund | Angel Oak vs. Queens Road Small |
| Saat Defensive vs. Saat Tax Managed Aggressive | Saat Defensive vs. Saat Market Growth | Saat Defensive vs. Saat Aggressive Strategy | Saat Defensive vs. Saat Aggressive Strategy |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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