Correlation Between Angel Oak and Global Equity
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Global Equity 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 Global Equity 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 Global Equity Portfolio, you can compare the effects of market volatilities on Angel Oak and Global Equity 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 Global Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Global Equity.
Diversification Opportunities for Angel Oak and Global Equity
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Angel and Global is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Ultrashort and Global Equity Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Equity Portfolio 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 Global Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Equity Portfolio has no effect on the direction of Angel Oak i.e., Angel Oak and Global Equity go up and down completely randomly.
Pair Corralation between Angel Oak and Global Equity
Assuming the 90 days horizon Angel Oak is expected to generate 7.51 times less return on investment than Global Equity. But when comparing it to its historical volatility, Angel Oak Ultrashort is 11.89 times less risky than Global Equity. It trades about 0.13 of its potential returns per unit of risk. Global Equity Portfolio is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,580 in Global Equity Portfolio on September 14, 2024 and sell it today you would earn a total of 27.00 from holding Global Equity Portfolio or generate 0.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Angel Oak Ultrashort vs. Global Equity Portfolio
Performance |
| Timeline |
| Angel Oak Ultrashort |
| Global Equity Portfolio |
Angel Oak and Global Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Global Equity
The main advantage of trading using opposite Angel Oak and Global Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Global Equity 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 Global Equity will offset losses from the drop in Global Equity's long position.| Angel Oak vs. Ftfa Franklin Templeton Growth | Angel Oak vs. Vy Baron Growth | Angel Oak vs. Qs Defensive Growth | Angel Oak vs. T Rowe Price |
| Global Equity vs. Astor Longshort Fund | Global Equity vs. Barings Active Short | Global Equity vs. Cmg Ultra Short | Global Equity vs. Angel Oak Ultrashort |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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