Correlation Between Mainstay High and Angel Oak
Can any of the company-specific risk be diversified away by investing in both Mainstay High 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 Mainstay High and Angel Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay High Yield and Angel Oak Financial, you can compare the effects of market volatilities on Mainstay High 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 Mainstay High with a short position of Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay High and Angel Oak.
Diversification Opportunities for Mainstay High and Angel Oak
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mainstay and Angel is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay High Yield 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 Mainstay High 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 Mainstay High Yield 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 Mainstay High i.e., Mainstay High and Angel Oak go up and down completely randomly.
Pair Corralation between Mainstay High and Angel Oak
Assuming the 90 days horizon Mainstay High Yield is expected to generate 1.38 times more return on investment than Angel Oak. However, Mainstay High is 1.38 times more volatile than Angel Oak Financial. It trades about 0.08 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 1,057 in Mainstay High Yield on December 1, 2024 and sell it today you would earn a total of 141.00 from holding Mainstay High Yield or generate 13.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay High Yield vs. Angel Oak Financial
Performance |
| Timeline |
| Mainstay High Yield |
| Angel Oak Financial |
Mainstay High and Angel Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay High and Angel Oak
The main advantage of trading using opposite Mainstay High and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay High 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.| Mainstay High vs. Live Oak Health | Mainstay High vs. Lord Abbett Health | Mainstay High vs. Tekla Healthcare Investors | Mainstay High vs. The Gabelli Healthcare |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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