Correlation Between Ford and Angel Oak
Can any of the company-specific risk be diversified away by investing in both Ford 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 Ford and Angel Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Angel Oak Multi Strategy, you can compare the effects of market volatilities on Ford 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 Ford with a short position of Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Angel Oak.
Diversification Opportunities for Ford and Angel Oak
Very good diversification
The 3 months correlation between Ford and Angel is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Angel Oak Multi Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angel Oak Multi and Ford 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 Ford Motor 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 Multi has no effect on the direction of Ford i.e., Ford and Angel Oak go up and down completely randomly.
Pair Corralation between Ford and Angel Oak
Taking into account the 90-day investment horizon Ford Motor is expected to generate 15.52 times more return on investment than Angel Oak. However, Ford is 15.52 times more volatile than Angel Oak Multi Strategy. It trades about 0.03 of its potential returns per unit of risk. Angel Oak Multi Strategy is currently generating about -0.06 per unit of risk. If you would invest 1,083 in Ford Motor on August 31, 2024 and sell it today you would earn a total of 27.00 from holding Ford Motor or generate 2.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Angel Oak Multi Strategy
Performance |
| Timeline |
| Ford Motor |
| Angel Oak Multi |
Ford and Angel Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Angel Oak
The main advantage of trading using opposite Ford and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford 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 idea behind Ford Motor and Angel Oak Multi Strategy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Angel Oak vs. Blackrock Health Sciences | Angel Oak vs. Highland Longshort Healthcare | Angel Oak vs. Baron Health Care | Angel Oak vs. Lord Abbett Health |
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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