Correlation Between Angel Oak and Horizon Us
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Horizon Us 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 Horizon Us 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 Horizon Defensive Equity, you can compare the effects of market volatilities on Angel Oak and Horizon Us 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 Horizon Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Horizon Us.
Diversification Opportunities for Angel Oak and Horizon Us
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Angel and Horizon is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Multi Strategy and Horizon Defensive Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Defensive Equity 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 Horizon Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Defensive Equity has no effect on the direction of Angel Oak i.e., Angel Oak and Horizon Us go up and down completely randomly.
Pair Corralation between Angel Oak and Horizon Us
Assuming the 90 days horizon Angel Oak is expected to generate 3.18 times less return on investment than Horizon Us. But when comparing it to its historical volatility, Angel Oak Multi Strategy is 3.62 times less risky than Horizon Us. It trades about 0.11 of its potential returns per unit of risk. Horizon Defensive Equity is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,495 in Horizon Defensive Equity on September 2, 2024 and sell it today you would earn a total of 947.00 from holding Horizon Defensive Equity or generate 37.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Angel Oak Multi Strategy vs. Horizon Defensive Equity
Performance |
| Timeline |
| Angel Oak Multi |
| Horizon Defensive Equity |
Angel Oak and Horizon Us Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Horizon Us
The main advantage of trading using opposite Angel Oak and Horizon Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Horizon Us 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 Horizon Us will offset losses from the drop in Horizon Us' 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 |
| Horizon Us vs. Horizon Active Risk | Horizon Us vs. Horizon Active Risk | Horizon Us vs. Horizon Active Asset | Horizon Us vs. Horizon Active Dividend |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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