Correlation Between Angel Oak and Sierra Core
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Sierra Core 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 Sierra Core 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 Sierra E Retirement, you can compare the effects of market volatilities on Angel Oak and Sierra Core 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 Sierra Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Sierra Core.
Diversification Opportunities for Angel Oak and Sierra Core
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Angel and Sierra is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Ultrashort and Sierra E Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sierra E Retirement 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 Sierra Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sierra E Retirement has no effect on the direction of Angel Oak i.e., Angel Oak and Sierra Core go up and down completely randomly.
Pair Corralation between Angel Oak and Sierra Core
Assuming the 90 days horizon Angel Oak is expected to generate 5.45 times less return on investment than Sierra Core. But when comparing it to its historical volatility, Angel Oak Ultrashort is 3.62 times less risky than Sierra Core. It trades about 0.15 of its potential returns per unit of risk. Sierra E Retirement is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 2,262 in Sierra E Retirement on August 30, 2024 and sell it today you would earn a total of 38.00 from holding Sierra E Retirement or generate 1.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Angel Oak Ultrashort vs. Sierra E Retirement
Performance |
| Timeline |
| Angel Oak Ultrashort |
| Sierra E Retirement |
Angel Oak and Sierra Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Sierra Core
The main advantage of trading using opposite Angel Oak and Sierra Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Sierra Core 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 Sierra Core will offset losses from the drop in Sierra Core's long position.| Angel Oak vs. Pimco Short Term Fund | Angel Oak vs. Short Term Fund Institutional | Angel Oak vs. Short Term Fund Administrative | Angel Oak vs. Short Term Fund R |
| Sierra Core vs. Sterling Capital Short | Sierra Core vs. Vanguard Short Term Federal | Sierra Core vs. Angel Oak Ultrashort | Sierra Core vs. Astor Longshort Fund |
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 CEOs Directory module to screen CEOs from public companies around the world.
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