Correlation Between MFS Government and Angel Oak
Can any of the company-specific risk be diversified away by investing in both MFS Government 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 MFS Government and Angel Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFS Government Markets and Angel Oak Financial, you can compare the effects of market volatilities on MFS Government 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 MFS Government with a short position of Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Government and Angel Oak.
Diversification Opportunities for MFS Government and Angel Oak
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MFS and Angel is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding MFS Government 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 MFS Government 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 MFS Government 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 MFS Government i.e., MFS Government and Angel Oak go up and down completely randomly.
Pair Corralation between MFS Government and Angel Oak
Considering the 90-day investment horizon MFS Government Markets is expected to under-perform the Angel Oak. But the etf apears to be less risky and, when comparing its historical volatility, MFS Government Markets is 1.07 times less risky than Angel Oak. The etf trades about -0.02 of its potential returns per unit of risk. The Angel Oak Financial is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,249 in Angel Oak Financial on August 28, 2024 and sell it today you would earn a total of 18.00 from holding Angel Oak Financial or generate 1.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFS Government Markets vs. Angel Oak Financial
Performance |
| Timeline |
| MFS Government Markets |
| Angel Oak Financial |
MFS Government and Angel Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Government and Angel Oak
The main advantage of trading using opposite MFS Government and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Government 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.| MFS Government vs. MFS Investment Grade | MFS Government vs. Invesco High Income | MFS Government vs. Eaton Vance National | MFS Government vs. Nuveen California Select |
| 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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