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 Developing and Angel Oak Financial, 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
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Angel is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Developing 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 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 Developing 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 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 Developing is expected to generate 4.3 times more return on investment than Angel Oak. However, American Funds is 4.3 times more volatile than Angel Oak Financial. It trades about 0.21 of its potential returns per unit of risk. Angel Oak Financial is currently generating about 0.4 per unit of risk. If you would invest 1,065 in American Funds Developing on September 16, 2024 and sell it today you would earn a total of 26.00 from holding American Funds Developing or generate 2.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds Developing vs. Angel Oak Financial
Performance |
| Timeline |
| American Funds Developing |
| Angel Oak Financial |
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 Financial | American Funds vs. Blackrock Financial Institutions | American Funds vs. Financials Ultrasector Profund | American Funds vs. Royce Global Financial |
| Angel Oak vs. Heartland Value Plus | Angel Oak vs. Lord Abbett Small | Angel Oak vs. Fidelity Small Cap | Angel Oak vs. John Hancock Ii |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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