Correlation Between Angel Oak and Absolute Convertible
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Absolute Convertible 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 Absolute Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Angel Oak Ultrashort and Absolute Convertible Arbitrage, you can compare the effects of market volatilities on Angel Oak and Absolute Convertible 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 Absolute Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Absolute Convertible.
Diversification Opportunities for Angel Oak and Absolute Convertible
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Angel and Absolute is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Ultrashort and Absolute Convertible Arbitrage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absolute Convertible 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 Ultrashort are associated (or correlated) with Absolute Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Absolute Convertible has no effect on the direction of Angel Oak i.e., Angel Oak and Absolute Convertible go up and down completely randomly.
Pair Corralation between Angel Oak and Absolute Convertible
Assuming the 90 days horizon Angel Oak is expected to generate 7.43 times less return on investment than Absolute Convertible. But when comparing it to its historical volatility, Angel Oak Ultrashort is 1.49 times less risky than Absolute Convertible. It trades about 0.13 of its potential returns per unit of risk. Absolute Convertible Arbitrage is currently generating about 0.66 of returns per unit of risk over similar time horizon. If you would invest 1,118 in Absolute Convertible Arbitrage on November 4, 2024 and sell it today you would earn a total of 9.00 from holding Absolute Convertible Arbitrage or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Angel Oak Ultrashort vs. Absolute Convertible Arbitrage
Performance |
| Timeline |
| Angel Oak Ultrashort |
| Absolute Convertible |
Angel Oak and Absolute Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Absolute Convertible
The main advantage of trading using opposite Angel Oak and Absolute Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Absolute Convertible 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 Absolute Convertible will offset losses from the drop in Absolute Convertible's long position.| Angel Oak vs. Qs Growth Fund | Angel Oak vs. Needham Aggressive Growth | Angel Oak vs. Growth Portfolio Class | Angel Oak vs. T Rowe Price |
| Absolute Convertible vs. Queens Road Small | Absolute Convertible vs. American Century Etf | Absolute Convertible vs. Vanguard Small Cap Value | Absolute Convertible vs. Amg River Road |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |