Correlation Between Nasdaq-100(r) and Angel Oak
Can any of the company-specific risk be diversified away by investing in both Nasdaq-100(r) 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 Nasdaq-100(r) and Angel Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 2x Strategy and Angel Oak Multi Strategy, you can compare the effects of market volatilities on Nasdaq-100(r) 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 Nasdaq-100(r) with a short position of Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100(r) and Angel Oak.
Diversification Opportunities for Nasdaq-100(r) and Angel Oak
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nasdaq-100(r) and Angel is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy 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 Nasdaq-100(r) 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 Nasdaq 100 2x Strategy 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 Nasdaq-100(r) i.e., Nasdaq-100(r) and Angel Oak go up and down completely randomly.
Pair Corralation between Nasdaq-100(r) and Angel Oak
Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to generate 14.59 times more return on investment than Angel Oak. However, Nasdaq-100(r) is 14.59 times more volatile than Angel Oak Multi Strategy. It trades about 0.07 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 55,321 in Nasdaq 100 2x Strategy on August 29, 2024 and sell it today you would earn a total of 1,747 from holding Nasdaq 100 2x Strategy or generate 3.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 2x Strategy vs. Angel Oak Multi Strategy
Performance |
| Timeline |
| Nasdaq 100 2x |
| Angel Oak Multi |
Nasdaq-100(r) and Angel Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq-100(r) and Angel Oak
The main advantage of trading using opposite Nasdaq-100(r) and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100(r) 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.| Nasdaq-100(r) vs. Nasdaq 100 2x Strategy | Nasdaq-100(r) vs. Direxion Monthly Nasdaq 100 | Nasdaq-100(r) vs. Ultranasdaq 100 Profund Ultranasdaq 100 | Nasdaq-100(r) vs. Nasdaq 100 2x Strategy |
| Angel Oak vs. Pimco Income Fund | Angel Oak vs. HUMANA INC | Angel Oak vs. Aquagold International | Angel Oak vs. Barloworld Ltd ADR |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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