Correlation Between Angel Oak and Rithm Capital
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Rithm Capital 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 Rithm Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Angel Oak Mortgage and Rithm Capital Corp, you can compare the effects of market volatilities on Angel Oak and Rithm Capital 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 Rithm Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Rithm Capital.
Diversification Opportunities for Angel Oak and Rithm Capital
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Angel and Rithm is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Mortgage and Rithm Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rithm Capital Corp 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 Mortgage are associated (or correlated) with Rithm Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rithm Capital Corp has no effect on the direction of Angel Oak i.e., Angel Oak and Rithm Capital go up and down completely randomly.
Pair Corralation between Angel Oak and Rithm Capital
Given the investment horizon of 90 days Angel Oak Mortgage is expected to generate 1.7 times more return on investment than Rithm Capital. However, Angel Oak is 1.7 times more volatile than Rithm Capital Corp. It trades about 0.07 of its potential returns per unit of risk. Rithm Capital Corp is currently generating about 0.08 per unit of risk. If you would invest 518.00 in Angel Oak Mortgage on August 31, 2024 and sell it today you would earn a total of 460.00 from holding Angel Oak Mortgage or generate 88.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Angel Oak Mortgage vs. Rithm Capital Corp
Performance |
| Timeline |
| Angel Oak Mortgage |
| Rithm Capital Corp |
Angel Oak and Rithm Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Rithm Capital
The main advantage of trading using opposite Angel Oak and Rithm Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Rithm Capital 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 Rithm Capital will offset losses from the drop in Rithm Capital's long position.| Angel Oak vs. Granite Point Mortgage | Angel Oak vs. MFA Financial | Angel Oak vs. Two Harbors Investments | Angel Oak vs. PennyMac Mortgage Investment |
| Rithm Capital vs. Ellington Financial | Rithm Capital vs. Dynex Capital | Rithm Capital vs. Orchid Island Capital | Rithm Capital vs. Invesco Mortgage Capital |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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