Correlation Between Angel Oak and American Funds
Can any of the company-specific risk be diversified away by investing in both Angel Oak and American Funds 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 American Funds 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 American Funds 2065, you can compare the effects of market volatilities on Angel Oak and American Funds 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 American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and American Funds.
Diversification Opportunities for Angel Oak and American Funds
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Angel and American is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Ultrashort and American Funds 2065 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds 2065 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 American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds 2065 has no effect on the direction of Angel Oak i.e., Angel Oak and American Funds go up and down completely randomly.
Pair Corralation between Angel Oak and American Funds
Assuming the 90 days horizon Angel Oak is expected to generate 3.24 times less return on investment than American Funds. But when comparing it to its historical volatility, Angel Oak Ultrashort is 7.4 times less risky than American Funds. It trades about 0.22 of its potential returns per unit of risk. American Funds 2065 is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,684 in American Funds 2065 on September 3, 2024 and sell it today you would earn a total of 147.00 from holding American Funds 2065 or generate 8.73% 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. American Funds 2065
Performance |
| Timeline |
| Angel Oak Ultrashort |
| American Funds 2065 |
Angel Oak and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and American Funds
The main advantage of trading using opposite Angel Oak and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.| Angel Oak vs. Icon Financial Fund | Angel Oak vs. Blackrock Financial Institutions | Angel Oak vs. Mesirow Financial Small | Angel Oak vs. Goldman Sachs Financial |
| American Funds vs. Nasdaq 100 Fund Class | American Funds vs. Vanguard Windsor Fund | American Funds vs. Commonwealth Global Fund | American Funds vs. Growth Strategy Fund |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |