Correlation Between Great-west Real and Angel Oak
Can any of the company-specific risk be diversified away by investing in both Great-west Real 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 Great-west Real and Angel Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great West Real Estate and Angel Oak Multi Strategy, you can compare the effects of market volatilities on Great-west Real 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 Great-west Real with a short position of Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great-west Real and Angel Oak.
Diversification Opportunities for Great-west Real and Angel Oak
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Great-west and Angel is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Great West Real Estate and Angel Oak Multi Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angel Oak Multi and Great-west Real 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 Great West Real Estate 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 Multi has no effect on the direction of Great-west Real i.e., Great-west Real and Angel Oak go up and down completely randomly.
Pair Corralation between Great-west Real and Angel Oak
Assuming the 90 days horizon Great West Real Estate is expected to generate 6.13 times more return on investment than Angel Oak. However, Great-west Real is 6.13 times more volatile than Angel Oak Multi Strategy. It trades about 0.02 of its potential returns per unit of risk. Angel Oak Multi Strategy is currently generating about 0.04 per unit of risk. If you would invest 1,347 in Great West Real Estate on August 28, 2024 and sell it today you would earn a total of 3.00 from holding Great West Real Estate or generate 0.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great West Real Estate vs. Angel Oak Multi Strategy
Performance |
| Timeline |
| Great West Real |
| Angel Oak Multi |
Great-west Real and Angel Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great-west Real and Angel Oak
The main advantage of trading using opposite Great-west Real and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great-west Real 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.| Great-west Real vs. Realty Income | Great-west Real vs. Dynex Capital | Great-west Real vs. First Industrial Realty | Great-west Real vs. Healthcare Realty Trust |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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