Correlation Between Steward Covered and Angel Oak
Can any of the company-specific risk be diversified away by investing in both Steward Covered 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 Steward Covered and Angel Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steward Ered Call and Angel Oak Ultrashort, you can compare the effects of market volatilities on Steward Covered 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 Steward Covered with a short position of Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steward Covered and Angel Oak.
Diversification Opportunities for Steward Covered and Angel Oak
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Steward and Angel is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Steward Ered Call 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 Steward Covered 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 Steward Ered Call 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 Steward Covered i.e., Steward Covered and Angel Oak go up and down completely randomly.
Pair Corralation between Steward Covered and Angel Oak
Assuming the 90 days horizon Steward Ered Call is expected to generate 5.86 times more return on investment than Angel Oak. However, Steward Covered is 5.86 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 0.15 per unit of risk. If you would invest 829.00 in Steward Ered Call on August 29, 2024 and sell it today you would earn a total of 13.00 from holding Steward Ered Call or generate 1.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steward Ered Call vs. Angel Oak Ultrashort
Performance |
| Timeline |
| Steward Ered Call |
| Angel Oak Ultrashort |
Steward Covered and Angel Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steward Covered and Angel Oak
The main advantage of trading using opposite Steward Covered and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steward Covered 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.| Steward Covered vs. Angel Oak Ultrashort | Steward Covered vs. Aqr Long Short Equity | Steward Covered vs. Federated Short Intermediate Duration | Steward Covered vs. Locorr Longshort Modities |
| Angel Oak vs. Pimco Short Term Fund | Angel Oak vs. Short Term Fund Institutional | Angel Oak vs. Short Term Fund Administrative | Angel Oak vs. Short Term Fund R |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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