Correlation Between Angel Oak and Franklin Federal
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Franklin Federal 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 Franklin Federal 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 Franklin Federal Limited Term, you can compare the effects of market volatilities on Angel Oak and Franklin Federal 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 Franklin Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Franklin Federal.
Diversification Opportunities for Angel Oak and Franklin Federal
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Angel and Franklin is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Ultrashort and Franklin Federal Limited Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Federal Lim 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 Franklin Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Federal Lim has no effect on the direction of Angel Oak i.e., Angel Oak and Franklin Federal go up and down completely randomly.
Pair Corralation between Angel Oak and Franklin Federal
Assuming the 90 days horizon Angel Oak is expected to generate 1.44 times less return on investment than Franklin Federal. But when comparing it to its historical volatility, Angel Oak Ultrashort is 1.52 times less risky than Franklin Federal. It trades about 0.09 of its potential returns per unit of risk. Franklin Federal Limited Term is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,028 in Franklin Federal Limited Term on August 23, 2024 and sell it today you would earn a total of 3.00 from holding Franklin Federal Limited Term or generate 0.29% 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. Franklin Federal Limited Term
Performance |
| Timeline |
| Angel Oak Ultrashort |
| Franklin Federal Lim |
Angel Oak and Franklin Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Franklin Federal
The main advantage of trading using opposite Angel Oak and Franklin Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Franklin Federal 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 Franklin Federal will offset losses from the drop in Franklin Federal's long position.| Angel Oak vs. Europac Gold Fund | Angel Oak vs. James Balanced Golden | Angel Oak vs. International Investors Gold | Angel Oak vs. Oppenheimer Gold Special |
| Franklin Federal vs. Vanguard Intermediate Term Tax Exempt | Franklin Federal vs. Vanguard Long Term Tax Exempt | Franklin Federal vs. Vanguard High Yield Tax Exempt |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |