Correlation Between The Short and Angel Oak
Can any of the company-specific risk be diversified away by investing in both The Short 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 The Short and Angel Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Short Term and Angel Oak Ultrashort, you can compare the effects of market volatilities on The Short 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 The Short with a short position of Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Short and Angel Oak.
Diversification Opportunities for The Short and Angel Oak
Good diversification
The 3 months correlation between The and Angel is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding The Short Term and Angel Oak Ultrashort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angel Oak Ultrashort and The Short 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 The Short Term 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 Ultrashort has no effect on the direction of The Short i.e., The Short and Angel Oak go up and down completely randomly.
Pair Corralation between The Short and Angel Oak
Assuming the 90 days horizon The Short is expected to generate 1.54 times less return on investment than Angel Oak. In addition to that, The Short is 1.24 times more volatile than Angel Oak Ultrashort. It trades about 0.12 of its total potential returns per unit of risk. Angel Oak Ultrashort is currently generating about 0.24 per unit of volatility. If you would invest 893.00 in Angel Oak Ultrashort on August 31, 2024 and sell it today you would earn a total of 90.00 from holding Angel Oak Ultrashort or generate 10.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Short Term vs. Angel Oak Ultrashort
Performance |
| Timeline |
| Short Term |
| Angel Oak Ultrashort |
The Short and Angel Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Short and Angel Oak
The main advantage of trading using opposite The Short and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Short 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.| The Short vs. Mesirow Financial Small | The Short vs. John Hancock Financial | The Short vs. Prudential Jennison Financial | The Short vs. Mesirow Financial Small |
| Angel Oak vs. Virtus Convertible | Angel Oak vs. Advent Claymore Convertible | Angel Oak vs. Calamos Dynamic Convertible | Angel Oak vs. Putnam Convertible Incm Gwth |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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