Correlation Between Energy Services and Angel Oak
Can any of the company-specific risk be diversified away by investing in both Energy Services 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 Energy Services and Angel Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Services Fund and Angel Oak Multi Strategy, you can compare the effects of market volatilities on Energy Services 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 Energy Services with a short position of Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Services and Angel Oak.
Diversification Opportunities for Energy Services and Angel Oak
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Energy and Angel is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Energy Services Fund 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 Energy Services 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 Energy Services 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 Multi has no effect on the direction of Energy Services i.e., Energy Services and Angel Oak go up and down completely randomly.
Pair Corralation between Energy Services and Angel Oak
Assuming the 90 days horizon Energy Services Fund is expected to generate 9.39 times more return on investment than Angel Oak. However, Energy Services is 9.39 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 0.1 per unit of risk. If you would invest 18,239 in Energy Services Fund on September 4, 2024 and sell it today you would earn a total of 1,013 from holding Energy Services Fund or generate 5.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Energy Services Fund vs. Angel Oak Multi Strategy
Performance |
| Timeline |
| Energy Services |
| Angel Oak Multi |
Energy Services and Angel Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Services and Angel Oak
The main advantage of trading using opposite Energy Services and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Services 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.| Energy Services vs. Goldman Sachs Short | Energy Services vs. Barings Active Short | Energy Services vs. Touchstone Ultra Short | Energy Services vs. Maryland Short Term Tax Free |
| Angel Oak vs. Rbb Fund | Angel Oak vs. Falcon Focus Scv | Angel Oak vs. Sei Daily Income | Angel Oak vs. Acm Dynamic Opportunity |
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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