Correlation Between Angel Oak and Small-cap Value
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Small-cap Value 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 Small-cap Value 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 Small Cap Value Series, you can compare the effects of market volatilities on Angel Oak and Small-cap Value 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 Small-cap Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Small-cap Value.
Diversification Opportunities for Angel Oak and Small-cap Value
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Angel and Small-cap is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Ultrashort and Small Cap Value Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Value 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 Small-cap Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Value has no effect on the direction of Angel Oak i.e., Angel Oak and Small-cap Value go up and down completely randomly.
Pair Corralation between Angel Oak and Small-cap Value
Assuming the 90 days horizon Angel Oak Ultrashort is expected to generate 0.09 times more return on investment than Small-cap Value. However, Angel Oak Ultrashort is 10.93 times less risky than Small-cap Value. It trades about 0.26 of its potential returns per unit of risk. Small Cap Value Series is currently generating about -0.22 per unit of risk. If you would invest 979.00 in Angel Oak Ultrashort on November 27, 2024 and sell it today you would earn a total of 5.00 from holding Angel Oak Ultrashort or generate 0.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Angel Oak Ultrashort vs. Small Cap Value Series
Performance |
| Timeline |
| Angel Oak Ultrashort |
| Small Cap Value |
Angel Oak and Small-cap Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Small-cap Value
The main advantage of trading using opposite Angel Oak and Small-cap Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Small-cap Value 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 Small-cap Value will offset losses from the drop in Small-cap Value's long position.| Angel Oak vs. Rational Strategic Allocation | Angel Oak vs. Pnc Balanced Allocation | Angel Oak vs. Alternative Asset Allocation | Angel Oak vs. Balanced Allocation Fund |
| Small-cap Value vs. Morgan Stanley Institutional | Small-cap Value vs. L Mason Qs | Small-cap Value vs. The Hartford International | Small-cap Value vs. Transamerica Asset Allocation |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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