Correlation Between Angel Oak and Strategic Bond
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Strategic Bond 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 Strategic Bond 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 Strategic Bond Fund, you can compare the effects of market volatilities on Angel Oak and Strategic Bond 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 Strategic Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Strategic Bond.
Diversification Opportunities for Angel Oak and Strategic Bond
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Angel and Strategic is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Ultrashort and Strategic Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Bond 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 Strategic Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Bond has no effect on the direction of Angel Oak i.e., Angel Oak and Strategic Bond go up and down completely randomly.
Pair Corralation between Angel Oak and Strategic Bond
Assuming the 90 days horizon Angel Oak Ultrashort is expected to generate 0.27 times more return on investment than Strategic Bond. However, Angel Oak Ultrashort is 3.68 times less risky than Strategic Bond. It trades about 0.23 of its potential returns per unit of risk. Strategic Bond Fund is currently generating about 0.03 per unit of risk. If you would invest 869.00 in Angel Oak Ultrashort on November 9, 2024 and sell it today you would earn a total of 114.00 from holding Angel Oak Ultrashort or generate 13.12% 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. Strategic Bond Fund
Performance |
| Timeline |
| Angel Oak Ultrashort |
| Strategic Bond |
Angel Oak and Strategic Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Strategic Bond
The main advantage of trading using opposite Angel Oak and Strategic Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Strategic Bond 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 Strategic Bond will offset losses from the drop in Strategic Bond's long position.| Angel Oak vs. John Hancock Funds | Angel Oak vs. Wilmington Diversified Income | Angel Oak vs. Global Diversified Income | Angel Oak vs. Saat Servative Strategy |
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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