Correlation Between American Funds and Angel Oak
Can any of the company-specific risk be diversified away by investing in both American Funds 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 American Funds and Angel Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds 2045 and Angel Oak Multi Strategy, you can compare the effects of market volatilities on American Funds 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 American Funds with a short position of Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Angel Oak.
Diversification Opportunities for American Funds and Angel Oak
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Angel is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding American Funds 2045 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 American Funds 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 American Funds 2045 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 American Funds i.e., American Funds and Angel Oak go up and down completely randomly.
Pair Corralation between American Funds and Angel Oak
Assuming the 90 days horizon American Funds 2045 is expected to generate 4.27 times more return on investment than Angel Oak. However, American Funds is 4.27 times more volatile than Angel Oak Multi Strategy. It trades about 0.13 of its potential returns per unit of risk. Angel Oak Multi Strategy is currently generating about 0.25 per unit of risk. If you would invest 2,195 in American Funds 2045 on September 13, 2024 and sell it today you would earn a total of 29.00 from holding American Funds 2045 or generate 1.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds 2045 vs. Angel Oak Multi Strategy
Performance |
| Timeline |
| American Funds 2045 |
| Angel Oak Multi |
American Funds and Angel Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Angel Oak
The main advantage of trading using opposite American Funds and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds 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.| American Funds vs. Angel Oak Multi Strategy | American Funds vs. Pnc Emerging Markets | American Funds vs. Mid Cap 15x Strategy | American Funds vs. Origin Emerging Markets |
| Angel Oak vs. Pace High Yield | Angel Oak vs. Neuberger Berman Income | Angel Oak vs. Virtus High Yield | Angel Oak vs. City National Rochdale |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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