Correlation Between Angel Oak and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Sterling 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 Sterling Capital 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 Sterling Capital Short, you can compare the effects of market volatilities on Angel Oak and Sterling 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 Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Sterling Capital.
Diversification Opportunities for Angel Oak and Sterling Capital
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Angel and Sterling is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Ultrashort and Sterling Capital Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Short 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 Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Short has no effect on the direction of Angel Oak i.e., Angel Oak and Sterling Capital go up and down completely randomly.
Pair Corralation between Angel Oak and Sterling Capital
Assuming the 90 days horizon Angel Oak is expected to generate 3.49 times less return on investment than Sterling Capital. But when comparing it to its historical volatility, Angel Oak Ultrashort is 2.01 times less risky than Sterling Capital. It trades about 0.13 of its potential returns per unit of risk. Sterling Capital Short is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 834.00 in Sterling Capital Short on September 13, 2024 and sell it today you would earn a total of 3.00 from holding Sterling Capital Short or generate 0.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Angel Oak Ultrashort vs. Sterling Capital Short
Performance |
| Timeline |
| Angel Oak Ultrashort |
| Sterling Capital Short |
Angel Oak and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Sterling Capital
The main advantage of trading using opposite Angel Oak and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Sterling 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 Sterling Capital will offset losses from the drop in Sterling Capital's long position.| Angel Oak vs. Angel Oak Multi Strategy | Angel Oak vs. Angel Oak Multi Strategy | Angel Oak vs. Angel Oak Multi Strategy | Angel Oak vs. Doubleline Income Solutions |
| Sterling Capital vs. Mesirow Financial Small | Sterling Capital vs. Davis Financial Fund | Sterling Capital vs. Fidelity Advisor Financial | Sterling Capital vs. Financials Ultrasector Profund |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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