Correlation Between Voya Emerging and Angel Oak
Can any of the company-specific risk be diversified away by investing in both Voya Emerging 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 Voya Emerging and Angel Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Emerging Markets and Angel Oak Financial, you can compare the effects of market volatilities on Voya Emerging 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 Voya Emerging with a short position of Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Emerging and Angel Oak.
Diversification Opportunities for Voya Emerging and Angel Oak
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Voya and Angel is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Voya Emerging Markets 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 Voya Emerging 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 Voya Emerging Markets 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 Voya Emerging i.e., Voya Emerging and Angel Oak go up and down completely randomly.
Pair Corralation between Voya Emerging and Angel Oak
Considering the 90-day investment horizon Voya Emerging is expected to generate 2.05 times less return on investment than Angel Oak. In addition to that, Voya Emerging is 2.0 times more volatile than Angel Oak Financial. It trades about 0.03 of its total potential returns per unit of risk. Angel Oak Financial is currently generating about 0.11 per unit of volatility. If you would invest 1,188 in Angel Oak Financial on August 31, 2024 and sell it today you would earn a total of 90.00 from holding Angel Oak Financial or generate 7.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Emerging Markets vs. Angel Oak Financial
Performance |
| Timeline |
| Voya Emerging Markets |
| Angel Oak Financial |
Voya Emerging and Angel Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Emerging and Angel Oak
The main advantage of trading using opposite Voya Emerging and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Emerging 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.| Voya Emerging vs. Nuveen Real Asset | Voya Emerging vs. Nuveen Mortgage Opportunity | Voya Emerging vs. Pgim Global High | Voya Emerging vs. Nuveen Core Equity |
| Angel Oak vs. Eaton Vance National | Angel Oak vs. Invesco High Income | Angel Oak vs. Blackrock Muniholdings Ny | Angel Oak vs. Nuveen California Select |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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