Correlation Between Heartland Value and Angel Oak
Can any of the company-specific risk be diversified away by investing in both Heartland Value 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 Heartland Value and Angel Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heartland Value Plus and Angel Oak Financial, you can compare the effects of market volatilities on Heartland Value 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 Heartland Value with a short position of Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heartland Value and Angel Oak.
Diversification Opportunities for Heartland Value and Angel Oak
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Heartland and Angel is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Heartland Value Plus 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 Heartland Value 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 Heartland Value Plus 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 Heartland Value i.e., Heartland Value and Angel Oak go up and down completely randomly.
Pair Corralation between Heartland Value and Angel Oak
Assuming the 90 days horizon Heartland Value Plus is expected to generate 4.75 times more return on investment than Angel Oak. However, Heartland Value is 4.75 times more volatile than Angel Oak Financial. It trades about 0.01 of its potential returns per unit of risk. Angel Oak Financial is currently generating about -0.03 per unit of risk. If you would invest 3,722 in Heartland Value Plus on September 16, 2024 and sell it today you would earn a total of 200.00 from holding Heartland Value Plus or generate 5.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heartland Value Plus vs. Angel Oak Financial
Performance |
| Timeline |
| Heartland Value Plus |
| Angel Oak Financial |
Heartland Value and Angel Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heartland Value and Angel Oak
The main advantage of trading using opposite Heartland Value and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heartland Value 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.| Heartland Value vs. Large Cap Fund | Heartland Value vs. Permanent Portfolio Class | Heartland Value vs. Aquagold International | Heartland Value vs. Morningstar Unconstrained Allocation |
| 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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