Correlation Between Angel Oak and Barings Active
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Barings Active 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 Barings Active 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 Barings Active Short, you can compare the effects of market volatilities on Angel Oak and Barings Active 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 Barings Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Barings Active.
Diversification Opportunities for Angel Oak and Barings Active
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Angel and Barings is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Ultrashort and Barings Active Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Active 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 Barings Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Active Short has no effect on the direction of Angel Oak i.e., Angel Oak and Barings Active go up and down completely randomly.
Pair Corralation between Angel Oak and Barings Active
Assuming the 90 days horizon Angel Oak is expected to generate 1.22 times less return on investment than Barings Active. But when comparing it to its historical volatility, Angel Oak Ultrashort is 1.26 times less risky than Barings Active. It trades about 0.23 of its potential returns per unit of risk. Barings Active Short is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 854.00 in Barings Active Short on August 26, 2024 and sell it today you would earn a total of 68.00 from holding Barings Active Short or generate 7.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Angel Oak Ultrashort vs. Barings Active Short
Performance |
| Timeline |
| Angel Oak Ultrashort |
| Barings Active Short |
Angel Oak and Barings Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Barings Active
The main advantage of trading using opposite Angel Oak and Barings Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Barings Active 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 Barings Active will offset losses from the drop in Barings Active's long position.| Angel Oak vs. Angel Oak Multi Strategy | Angel Oak vs. Angel Oak Multi Strategy | Angel Oak vs. Doubleline Income Solutions | Angel Oak vs. Angel Oak Ultrashort |
| Barings Active vs. Barings Emerging Markets | Barings Active vs. Barings Emerging Markets | Barings Active vs. Barings Global Floating | Barings Active vs. Barings Global Floating |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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