Correlation Between Bank of America and Angel Oak
Can any of the company-specific risk be diversified away by investing in both Bank of America and Angel Oak 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 Bank of America and Angel Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of America and Angel Oak Mortgage Backed, you can compare the effects of market volatilities on Bank of America and Angel Oak 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 Bank of America with a short position of Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Angel Oak.
Diversification Opportunities for Bank of America and Angel Oak
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Angel is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Angel Oak Mortgage Backed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angel Oak Mortgage and Bank of America 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 Bank of America are associated (or correlated) with Angel Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Angel Oak Mortgage has no effect on the direction of Bank of America i.e., Bank of America and Angel Oak go up and down completely randomly.
Pair Corralation between Bank of America and Angel Oak
Considering the 90-day investment horizon Bank of America is expected to under-perform the Angel Oak. In addition to that, Bank of America is 5.26 times more volatile than Angel Oak Mortgage Backed. It trades about -0.04 of its total potential returns per unit of risk. Angel Oak Mortgage Backed is currently generating about 0.27 per unit of volatility. If you would invest 854.00 in Angel Oak Mortgage Backed on December 1, 2024 and sell it today you would earn a total of 13.00 from holding Angel Oak Mortgage Backed or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Angel Oak Mortgage Backed
Performance |
| Timeline |
| Bank of America |
| Angel Oak Mortgage |
Bank of America and Angel Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Angel Oak
The main advantage of trading using opposite Bank of America and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Angel Oak 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 Angel Oak will offset losses from the drop in Angel Oak's long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Toronto Dominion Bank | Bank of America vs. Royal Bank of |
| Angel Oak vs. Columbia Diversified Fixed | Angel Oak vs. MFS Active Core | Angel Oak vs. Doubleline Etf Trust | Angel Oak vs. Virtus Newfleet ABSMBS |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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