Correlation Between Nicholas and Angel Oak
Can any of the company-specific risk be diversified away by investing in both Nicholas 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 Nicholas and Angel Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nicholas Ltd Edition and Angel Oak Ultrashort, you can compare the effects of market volatilities on Nicholas 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 Nicholas with a short position of Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nicholas and Angel Oak.
Diversification Opportunities for Nicholas and Angel Oak
Poor diversification
The 3 months correlation between Nicholas and Angel is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Nicholas Ltd Edition and Angel Oak Ultrashort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angel Oak Ultrashort and Nicholas 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 Nicholas Ltd Edition 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 Ultrashort has no effect on the direction of Nicholas i.e., Nicholas and Angel Oak go up and down completely randomly.
Pair Corralation between Nicholas and Angel Oak
Assuming the 90 days horizon Nicholas Ltd Edition is expected to generate 10.66 times more return on investment than Angel Oak. However, Nicholas is 10.66 times more volatile than Angel Oak Ultrashort. It trades about 0.13 of its potential returns per unit of risk. Angel Oak Ultrashort is currently generating about 0.22 per unit of risk. If you would invest 2,490 in Nicholas Ltd Edition on September 1, 2024 and sell it today you would earn a total of 453.00 from holding Nicholas Ltd Edition or generate 18.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Nicholas Ltd Edition vs. Angel Oak Ultrashort
Performance |
| Timeline |
| Nicholas Edition |
| Angel Oak Ultrashort |
Nicholas and Angel Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nicholas and Angel Oak
The main advantage of trading using opposite Nicholas and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nicholas 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.| Nicholas vs. Nicholas Equity Income | Nicholas vs. Nicholas Ltd Edition | Nicholas vs. Nicholas Ii Inc | Nicholas vs. Nicholas Fund Inc |
| Angel Oak vs. Virtus High Yield | Angel Oak vs. Blackrock High Yield | Angel Oak vs. Siit High Yield | Angel Oak vs. Pace High Yield |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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