Correlation Between Dunham High and Angel Oak
Can any of the company-specific risk be diversified away by investing in both Dunham High 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 Dunham High and Angel Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham High Yield and Angel Oak Financial, you can compare the effects of market volatilities on Dunham High 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 Dunham High with a short position of Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham High and Angel Oak.
Diversification Opportunities for Dunham High and Angel Oak
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dunham and Angel is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Dunham High Yield 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 Dunham High 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 Dunham High Yield 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 Dunham High i.e., Dunham High and Angel Oak go up and down completely randomly.
Pair Corralation between Dunham High and Angel Oak
Assuming the 90 days horizon Dunham High Yield is expected to generate 1.03 times more return on investment than Angel Oak. However, Dunham High is 1.03 times more volatile than Angel Oak Financial. It trades about 0.18 of its potential returns per unit of risk. Angel Oak Financial is currently generating about -0.03 per unit of risk. If you would invest 710.00 in Dunham High Yield on November 9, 2024 and sell it today you would earn a total of 164.00 from holding Dunham High Yield or generate 23.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham High Yield vs. Angel Oak Financial
Performance |
| Timeline |
| Dunham High Yield |
| Angel Oak Financial |
Dunham High and Angel Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham High and Angel Oak
The main advantage of trading using opposite Dunham High and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham High 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.| Dunham High vs. Science Technology Fund | Dunham High vs. Invesco Technology Fund | Dunham High vs. Red Oak Technology | Dunham High vs. Columbia Global Technology |
| Angel Oak vs. Jp Morgan Smartretirement | Angel Oak vs. American Funds Retirement | Angel Oak vs. Columbia Moderate Growth | Angel Oak vs. Wealthbuilder Moderate Balanced |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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