Correlation Between Omni Small-cap and Angel Oak
Can any of the company-specific risk be diversified away by investing in both Omni Small-cap 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 Omni Small-cap and Angel Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Omni Small Cap Value and Angel Oak Financial, you can compare the effects of market volatilities on Omni Small-cap 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 Omni Small-cap with a short position of Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omni Small-cap and Angel Oak.
Diversification Opportunities for Omni Small-cap and Angel Oak
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Omni and Angel is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Omni Small Cap Value and Angel Oak Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angel Oak Financial and Omni Small-cap 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 Omni Small Cap Value 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 Financial has no effect on the direction of Omni Small-cap i.e., Omni Small-cap and Angel Oak go up and down completely randomly.
Pair Corralation between Omni Small-cap and Angel Oak
Assuming the 90 days horizon Omni Small Cap Value is expected to generate 6.7 times more return on investment than Angel Oak. However, Omni Small-cap is 6.7 times more volatile than Angel Oak Financial. It trades about 0.02 of its potential returns per unit of risk. Angel Oak Financial is currently generating about -0.05 per unit of risk. If you would invest 1,925 in Omni Small Cap Value on September 4, 2024 and sell it today you would earn a total of 227.00 from holding Omni Small Cap Value or generate 11.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Omni Small Cap Value vs. Angel Oak Financial
Performance |
| Timeline |
| Omni Small Cap |
| Angel Oak Financial |
Omni Small-cap and Angel Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omni Small-cap and Angel Oak
The main advantage of trading using opposite Omni Small-cap and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omni Small-cap 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.| Omni Small-cap vs. Morningstar Global Income | Omni Small-cap vs. Franklin Mutual Global | Omni Small-cap vs. Ab Global Risk | Omni Small-cap vs. Scharf Global Opportunity |
| Angel Oak vs. Vanguard Total Stock | Angel Oak vs. Vanguard 500 Index | Angel Oak vs. Vanguard Total Stock | Angel Oak vs. Vanguard Total Stock |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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