Correlation Between Angel Oak and Short Duration
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Short Duration 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 Short Duration 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 Short Duration Bond, you can compare the effects of market volatilities on Angel Oak and Short Duration 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 Short Duration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Short Duration.
Diversification Opportunities for Angel Oak and Short Duration
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Angel and Short is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Ultrashort and Short Duration Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Duration 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 Short Duration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Duration Bond has no effect on the direction of Angel Oak i.e., Angel Oak and Short Duration go up and down completely randomly.
Pair Corralation between Angel Oak and Short Duration
Assuming the 90 days horizon Angel Oak Ultrashort is expected to generate 0.94 times more return on investment than Short Duration. However, Angel Oak Ultrashort is 1.06 times less risky than Short Duration. It trades about 0.16 of its potential returns per unit of risk. Short Duration Bond is currently generating about -0.05 per unit of risk. If you would invest 979.00 in Angel Oak Ultrashort on August 28, 2024 and sell it today you would earn a total of 3.00 from holding Angel Oak Ultrashort or generate 0.31% 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. Short Duration Bond
Performance |
| Timeline |
| Angel Oak Ultrashort |
| Short Duration Bond |
Angel Oak and Short Duration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Short Duration
The main advantage of trading using opposite Angel Oak and Short Duration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Short Duration 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 Short Duration will offset losses from the drop in Short Duration's long position.| Angel Oak vs. Angel Oak Multi Strategy | Angel Oak vs. Angel Oak Multi Strategy | Angel Oak vs. Doubleline Income Solutions | Angel Oak vs. Angel Oak Ultrashort |
| Short Duration vs. Short Intermediate Bond Fund | Short Duration vs. Aqr Long Short Equity | Short Duration vs. Vanguard Institutional Short Term | Short Duration vs. Angel Oak Ultrashort |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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