Correlation Between High Yield and Angel Oak
Can any of the company-specific risk be diversified away by investing in both High Yield 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 High Yield and Angel Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Yield Fund and Angel Oak Ultrashort, you can compare the effects of market volatilities on High Yield 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 High Yield with a short position of Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Yield and Angel Oak.
Diversification Opportunities for High Yield and Angel Oak
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between High and Angel is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding High Yield Fund 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 High Yield 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 High Yield Fund 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 High Yield i.e., High Yield and Angel Oak go up and down completely randomly.
Pair Corralation between High Yield and Angel Oak
Assuming the 90 days horizon High Yield Fund is expected to generate 2.39 times more return on investment than Angel Oak. However, High Yield is 2.39 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 0.23 per unit of risk. If you would invest 695.00 in High Yield Fund on September 4, 2024 and sell it today you would earn a total of 124.00 from holding High Yield Fund or generate 17.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Yield Fund vs. Angel Oak Ultrashort
Performance |
| Timeline |
| High Yield Fund |
| Angel Oak Ultrashort |
High Yield and Angel Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Yield and Angel Oak
The main advantage of trading using opposite High Yield and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Yield 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.| High Yield vs. Angel Oak Ultrashort | High Yield vs. Siit Ultra Short | High Yield vs. Federated Short Term Income | High Yield vs. Aqr Long Short Equity |
| Angel Oak vs. Angel Oak Multi Strategy | Angel Oak vs. Angel Oak Multi Strategy | Angel Oak vs. Doubleline Income Solutions | Angel Oak vs. Angel Oak Ultrashort |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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