Correlation Between Wells Fargo and Angel Oak
Can any of the company-specific risk be diversified away by investing in both Wells Fargo 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 Wells Fargo and Angel Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wells Fargo Short Term and Angel Oak Multi Strategy, you can compare the effects of market volatilities on Wells Fargo 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 Wells Fargo with a short position of Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wells Fargo and Angel Oak.
Diversification Opportunities for Wells Fargo and Angel Oak
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wells and Angel is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Wells Fargo Short Term 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 Wells Fargo 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 Wells Fargo Short Term 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 Wells Fargo i.e., Wells Fargo and Angel Oak go up and down completely randomly.
Pair Corralation between Wells Fargo and Angel Oak
Assuming the 90 days horizon Wells Fargo Short Term is expected to generate 0.73 times more return on investment than Angel Oak. However, Wells Fargo Short Term is 1.36 times less risky than Angel Oak. It trades about 0.15 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 765.00 in Wells Fargo Short Term on August 26, 2024 and sell it today you would earn a total of 89.00 from holding Wells Fargo Short Term or generate 11.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wells Fargo Short Term vs. Angel Oak Multi Strategy
Performance |
| Timeline |
| Wells Fargo Short |
| Angel Oak Multi |
Wells Fargo and Angel Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wells Fargo and Angel Oak
The main advantage of trading using opposite Wells Fargo and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wells Fargo 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.| Wells Fargo vs. Origin Emerging Markets | Wells Fargo vs. Artisan Emerging Markets | Wells Fargo vs. Pnc Emerging Markets | Wells Fargo vs. Investec Emerging Markets |
| 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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