Correlation Between Angel Oak and Touchstone Arbitrage
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Touchstone Arbitrage 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 Touchstone Arbitrage 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 Touchstone Arbitrage Fund, you can compare the effects of market volatilities on Angel Oak and Touchstone Arbitrage 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 Touchstone Arbitrage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Touchstone Arbitrage.
Diversification Opportunities for Angel Oak and Touchstone Arbitrage
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Angel and Touchstone is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Multi Strategy and Touchstone Arbitrage Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Arbitrage 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 Touchstone Arbitrage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Arbitrage has no effect on the direction of Angel Oak i.e., Angel Oak and Touchstone Arbitrage go up and down completely randomly.
Pair Corralation between Angel Oak and Touchstone Arbitrage
Assuming the 90 days horizon Angel Oak is expected to generate 2.83 times less return on investment than Touchstone Arbitrage. But when comparing it to its historical volatility, Angel Oak Multi Strategy is 1.16 times less risky than Touchstone Arbitrage. It trades about 0.21 of its potential returns per unit of risk. Touchstone Arbitrage Fund is currently generating about 0.5 of returns per unit of risk over similar time horizon. If you would invest 930.00 in Touchstone Arbitrage Fund on September 14, 2024 and sell it today you would earn a total of 13.00 from holding Touchstone Arbitrage Fund or generate 1.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Angel Oak Multi Strategy vs. Touchstone Arbitrage Fund
Performance |
| Timeline |
| Angel Oak Multi |
| Touchstone Arbitrage |
Angel Oak and Touchstone Arbitrage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Touchstone Arbitrage
The main advantage of trading using opposite Angel Oak and Touchstone Arbitrage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Touchstone Arbitrage 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 Touchstone Arbitrage will offset losses from the drop in Touchstone Arbitrage's long position.| Angel Oak vs. Pgim Jennison Diversified | Angel Oak vs. Small Cap Stock | Angel Oak vs. Davenport Small Cap | Angel Oak vs. Tiaa Cref Small Cap Blend |
| Touchstone Arbitrage vs. Touchstone Small Cap | Touchstone Arbitrage vs. Touchstone Sands Capital | Touchstone Arbitrage vs. Mid Cap Growth | Touchstone Arbitrage vs. Mid Cap Growth |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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