Correlation Between MicroSectors FANG and Angel Oak
Can any of the company-specific risk be diversified away by investing in both MicroSectors FANG 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 MicroSectors FANG and Angel Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MicroSectors FANG Index and Angel Oak Ultrashort, you can compare the effects of market volatilities on MicroSectors FANG 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 MicroSectors FANG with a short position of Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of MicroSectors FANG and Angel Oak.
Diversification Opportunities for MicroSectors FANG and Angel Oak
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MicroSectors and Angel is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding MicroSectors FANG Index and Angel Oak Ultrashort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angel Oak Ultrashort and MicroSectors FANG 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 MicroSectors FANG Index 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 Ultrashort has no effect on the direction of MicroSectors FANG i.e., MicroSectors FANG and Angel Oak go up and down completely randomly.
Pair Corralation between MicroSectors FANG and Angel Oak
Given the investment horizon of 90 days MicroSectors FANG Index is expected to under-perform the Angel Oak. In addition to that, MicroSectors FANG is 82.57 times more volatile than Angel Oak Ultrashort. It trades about -0.11 of its total potential returns per unit of risk. Angel Oak Ultrashort is currently generating about 0.48 per unit of volatility. If you would invest 4,623 in Angel Oak Ultrashort on August 30, 2024 and sell it today you would earn a total of 505.00 from holding Angel Oak Ultrashort or generate 10.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MicroSectors FANG Index vs. Angel Oak Ultrashort
Performance |
| Timeline |
| MicroSectors FANG Index |
| Angel Oak Ultrashort |
MicroSectors FANG and Angel Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MicroSectors FANG and Angel Oak
The main advantage of trading using opposite MicroSectors FANG and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MicroSectors FANG 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.| MicroSectors FANG vs. MicroSectors FANG Index | MicroSectors FANG vs. Direxion Daily Semiconductor | MicroSectors FANG vs. Direxion Daily Technology | MicroSectors FANG vs. Direxion Daily SP |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |