Correlation Between Invesco Mortgage and Angel Oak
Can any of the company-specific risk be diversified away by investing in both Invesco Mortgage 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 Invesco Mortgage and Angel Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Mortgage Capital and Angel Oak Mortgage, you can compare the effects of market volatilities on Invesco Mortgage 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 Invesco Mortgage with a short position of Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Mortgage and Angel Oak.
Diversification Opportunities for Invesco Mortgage and Angel Oak
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Invesco and Angel is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Mortgage Capital and Angel Oak Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angel Oak Mortgage and Invesco Mortgage 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 Invesco Mortgage Capital 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 Invesco Mortgage i.e., Invesco Mortgage and Angel Oak go up and down completely randomly.
Pair Corralation between Invesco Mortgage and Angel Oak
Considering the 90-day investment horizon Invesco Mortgage Capital is expected to under-perform the Angel Oak. But the stock apears to be less risky and, when comparing its historical volatility, Invesco Mortgage Capital is 1.42 times less risky than Angel Oak. The stock trades about -0.05 of its potential returns per unit of risk. The Angel Oak Mortgage is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 895.00 in Angel Oak Mortgage on August 27, 2024 and sell it today you would earn a total of 66.00 from holding Angel Oak Mortgage or generate 7.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Mortgage Capital vs. Angel Oak Mortgage
Performance |
| Timeline |
| Invesco Mortgage Capital |
| Angel Oak Mortgage |
Invesco Mortgage and Angel Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Mortgage and Angel Oak
The main advantage of trading using opposite Invesco Mortgage and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Mortgage 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.| Invesco Mortgage vs. MFA Financial | Invesco Mortgage vs. Two Harbors Investments | Invesco Mortgage vs. New York Mortgage | Invesco Mortgage vs. ARMOUR Residential REIT |
| Angel Oak vs. Granite Point Mortgage | Angel Oak vs. MFA Financial | Angel Oak vs. Two Harbors Investments | Angel Oak vs. PennyMac Mortgage Investment |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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