Correlation Between Nuveen California and Angel Oak
Can any of the company-specific risk be diversified away by investing in both Nuveen California 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 Nuveen California and Angel Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen California Select and Angel Oak Financial, you can compare the effects of market volatilities on Nuveen California 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 Nuveen California with a short position of Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen California and Angel Oak.
Diversification Opportunities for Nuveen California and Angel Oak
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nuveen and Angel is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen California Select 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 Nuveen California 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 Nuveen California Select 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 Nuveen California i.e., Nuveen California and Angel Oak go up and down completely randomly.
Pair Corralation between Nuveen California and Angel Oak
Considering the 90-day investment horizon Nuveen California Select is expected to under-perform the Angel Oak. But the stock apears to be less risky and, when comparing its historical volatility, Nuveen California Select is 1.0 times less risky than Angel Oak. The stock trades about -0.03 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 |
Nuveen California Select vs. Angel Oak Financial
Performance |
| Timeline |
| Nuveen California Select |
| Angel Oak Financial |
Nuveen California and Angel Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen California and Angel Oak
The main advantage of trading using opposite Nuveen California and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen California 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.| Nuveen California vs. PowerUp Acquisition Corp | Nuveen California vs. Aurora Innovation | Nuveen California vs. HUMANA INC | Nuveen California vs. Aquagold International |
| 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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