Correlation Between Angel Oak and Government Street
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Government Street 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 Government Street 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 Government Street Equity, you can compare the effects of market volatilities on Angel Oak and Government Street 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 Government Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Government Street.
Diversification Opportunities for Angel Oak and Government Street
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Angel and Government is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Ultrashort and Government Street Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Government Street Equity 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 Government Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Government Street Equity has no effect on the direction of Angel Oak i.e., Angel Oak and Government Street go up and down completely randomly.
Pair Corralation between Angel Oak and Government Street
Assuming the 90 days horizon Angel Oak is expected to generate 4.57 times less return on investment than Government Street. But when comparing it to its historical volatility, Angel Oak Ultrashort is 7.42 times less risky than Government Street. It trades about 0.23 of its potential returns per unit of risk. Government Street Equity is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 12,952 in Government Street Equity on October 25, 2024 and sell it today you would earn a total of 313.00 from holding Government Street Equity or generate 2.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Angel Oak Ultrashort vs. Government Street Equity
Performance |
| Timeline |
| Angel Oak Ultrashort |
| Government Street Equity |
Angel Oak and Government Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Government Street
The main advantage of trading using opposite Angel Oak and Government Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Government Street 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 Government Street will offset losses from the drop in Government Street's long position.| Angel Oak vs. Transamerica Emerging Markets | Angel Oak vs. Investec Emerging Markets | Angel Oak vs. Embark Commodity Strategy | Angel Oak vs. Balanced Strategy Fund |
| Government Street vs. Angel Oak Ultrashort | Government Street vs. Oakhurst Short Duration | Government Street vs. Siit Ultra Short | Government Street vs. Cmg Ultra Short |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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