Correlation Between Angel Oak and Invesco Municipal
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Invesco Municipal 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 Angel Oak and Invesco Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Angel Oak Financial and Invesco Municipal Trust, you can compare the effects of market volatilities on Angel Oak and Invesco Municipal 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 Angel Oak with a short position of Invesco Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Invesco Municipal.
Diversification Opportunities for Angel Oak and Invesco Municipal
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Angel and Invesco is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Financial and Invesco Municipal Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Municipal Trust and Angel Oak 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 Angel Oak Financial are associated (or correlated) with Invesco Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Municipal Trust has no effect on the direction of Angel Oak i.e., Angel Oak and Invesco Municipal go up and down completely randomly.
Pair Corralation between Angel Oak and Invesco Municipal
Given the investment horizon of 90 days Angel Oak Financial is expected to under-perform the Invesco Municipal. But the stock apears to be less risky and, when comparing its historical volatility, Angel Oak Financial is 1.86 times less risky than Invesco Municipal. The stock trades about -0.08 of its potential returns per unit of risk. The Invesco Municipal Trust is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,000.00 in Invesco Municipal Trust on September 3, 2024 and sell it today you would earn a total of 29.00 from holding Invesco Municipal Trust or generate 2.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Angel Oak Financial vs. Invesco Municipal Trust
Performance |
| Timeline |
| Angel Oak Financial |
| Invesco Municipal Trust |
Angel Oak and Invesco Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Invesco Municipal
The main advantage of trading using opposite Angel Oak and Invesco Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Invesco Municipal 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 Invesco Municipal will offset losses from the drop in Invesco Municipal's long position.| Angel Oak vs. Eaton Vance National | Angel Oak vs. Invesco High Income | Angel Oak vs. Blackrock Muniholdings Ny | Angel Oak vs. Nuveen California Select |
| Invesco Municipal vs. Invesco Trust For | Invesco Municipal vs. Invesco Quality Municipal | Invesco Municipal vs. Invesco Municipal Opportunity | Invesco Municipal vs. MFS High Income |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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