Correlation Between Angel Oak and Franklin Federal
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Franklin Federal 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 Franklin Federal 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 Franklin Federal Limited Term, you can compare the effects of market volatilities on Angel Oak and Franklin Federal 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 Franklin Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Franklin Federal.
Diversification Opportunities for Angel Oak and Franklin Federal
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Angel and FRANKLIN is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Multi Strategy and Franklin Federal Limited Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Federal Lim 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 Franklin Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Federal Lim has no effect on the direction of Angel Oak i.e., Angel Oak and Franklin Federal go up and down completely randomly.
Pair Corralation between Angel Oak and Franklin Federal
Assuming the 90 days horizon Angel Oak Multi Strategy is expected to generate 1.6 times more return on investment than Franklin Federal. However, Angel Oak is 1.6 times more volatile than Franklin Federal Limited Term. It trades about 0.19 of its potential returns per unit of risk. Franklin Federal Limited Term is currently generating about 0.21 per unit of risk. If you would invest 834.00 in Angel Oak Multi Strategy on September 3, 2024 and sell it today you would earn a total of 34.00 from holding Angel Oak Multi Strategy or generate 4.08% 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. Franklin Federal Limited Term
Performance |
| Timeline |
| Angel Oak Multi |
| Franklin Federal Lim |
Angel Oak and Franklin Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Franklin Federal
The main advantage of trading using opposite Angel Oak and Franklin Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Franklin Federal 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 Franklin Federal will offset losses from the drop in Franklin Federal's long position.| Angel Oak vs. Delaware Healthcare Fund | Angel Oak vs. Deutsche Health And | Angel Oak vs. Highland Longshort Healthcare | Angel Oak vs. Baillie Gifford Health |
| Franklin Federal vs. Alpine High Yield | Franklin Federal vs. Guggenheim High Yield | Franklin Federal vs. Blackrock High Yield | Franklin Federal vs. Pace High Yield |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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