Correlation Between Angel Oak and Nebraska Municipal
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Nebraska Municipal 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 Nebraska Municipal 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 Nebraska Municipal Fund, you can compare the effects of market volatilities on Angel Oak and Nebraska Municipal 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 Nebraska Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Nebraska Municipal.
Diversification Opportunities for Angel Oak and Nebraska Municipal
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Angel and Nebraska is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Ultrashort and Nebraska Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nebraska Municipal 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 Nebraska Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nebraska Municipal has no effect on the direction of Angel Oak i.e., Angel Oak and Nebraska Municipal go up and down completely randomly.
Pair Corralation between Angel Oak and Nebraska Municipal
Assuming the 90 days horizon Angel Oak Ultrashort is expected to generate 0.48 times more return on investment than Nebraska Municipal. However, Angel Oak Ultrashort is 2.1 times less risky than Nebraska Municipal. It trades about 0.22 of its potential returns per unit of risk. Nebraska Municipal Fund is currently generating about 0.03 per unit of risk. If you would invest 881.00 in Angel Oak Ultrashort on September 1, 2024 and sell it today you would earn a total of 102.00 from holding Angel Oak Ultrashort or generate 11.58% 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. Nebraska Municipal Fund
Performance |
| Timeline |
| Angel Oak Ultrashort |
| Nebraska Municipal |
Angel Oak and Nebraska Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Nebraska Municipal
The main advantage of trading using opposite Angel Oak and Nebraska Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Nebraska Municipal 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 Nebraska Municipal will offset losses from the drop in Nebraska Municipal's long position.| Angel Oak vs. Virtus High Yield | Angel Oak vs. Blackrock High Yield | Angel Oak vs. Siit High Yield | Angel Oak vs. Pace High Yield |
| Nebraska Municipal vs. Lord Abbett Convertible | Nebraska Municipal vs. Harbor Vertible Securities | Nebraska Municipal vs. Virtus Convertible | Nebraska Municipal vs. Rationalpier 88 Convertible |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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