Correlation Between HP and Angel Oak
Can any of the company-specific risk be diversified away by investing in both HP 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 HP and Angel Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HP Inc and Angel Oak Mortgage Backed, you can compare the effects of market volatilities on HP 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 HP with a short position of Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of HP and Angel Oak.
Diversification Opportunities for HP and Angel Oak
Average diversification
The 3 months correlation between HP and Angel is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding HP Inc and Angel Oak Mortgage Backed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angel Oak Mortgage and HP 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 HP Inc 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 Mortgage has no effect on the direction of HP i.e., HP and Angel Oak go up and down completely randomly.
Pair Corralation between HP and Angel Oak
Considering the 90-day investment horizon HP Inc is expected to under-perform the Angel Oak. In addition to that, HP is 7.08 times more volatile than Angel Oak Mortgage Backed. It trades about -0.14 of its total potential returns per unit of risk. Angel Oak Mortgage Backed is currently generating about 0.27 per unit of volatility. If you would invest 854.00 in Angel Oak Mortgage Backed on December 1, 2024 and sell it today you would earn a total of 13.00 from holding Angel Oak Mortgage Backed or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HP Inc vs. Angel Oak Mortgage Backed
Performance |
| Timeline |
| HP Inc |
| Angel Oak Mortgage |
HP and Angel Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HP and Angel Oak
The main advantage of trading using opposite HP and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HP 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 HP Inc and Angel Oak Mortgage Backed 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. Columbia Diversified Fixed | Angel Oak vs. MFS Active Core | Angel Oak vs. Doubleline Etf Trust | Angel Oak vs. Virtus Newfleet ABSMBS |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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