Correlation Between California Bond and Angel Oak
Can any of the company-specific risk be diversified away by investing in both California Bond 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 California Bond and Angel Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between California Bond Fund and Angel Oak Financial, you can compare the effects of market volatilities on California Bond 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 California Bond with a short position of Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of California Bond and Angel Oak.
Diversification Opportunities for California Bond and Angel Oak
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between California and Angel is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding California Bond Fund and Angel Oak Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angel Oak Financial and California Bond 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 California Bond 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 Financial has no effect on the direction of California Bond i.e., California Bond and Angel Oak go up and down completely randomly.
Pair Corralation between California Bond and Angel Oak
Assuming the 90 days horizon California Bond Fund is expected to generate 1.92 times more return on investment than Angel Oak. However, California Bond is 1.92 times more volatile than Angel Oak Financial. It trades about 0.22 of its potential returns per unit of risk. Angel Oak Financial is currently generating about 0.0 per unit of risk. If you would invest 1,026 in California Bond Fund on August 24, 2024 and sell it today you would earn a total of 18.00 from holding California Bond Fund or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
California Bond Fund vs. Angel Oak Financial
Performance |
| Timeline |
| California Bond |
| Angel Oak Financial |
California Bond and Angel Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with California Bond and Angel Oak
The main advantage of trading using opposite California Bond and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if California Bond 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.| California Bond vs. Vanguard California Long Term | California Bond vs. HUMANA INC | California Bond vs. Aquagold International | California Bond vs. Barloworld Ltd ADR |
| Angel Oak vs. Shelton Emerging Markets | Angel Oak vs. Ashmore Emerging Markets | Angel Oak vs. Transamerica Emerging Markets | Angel Oak vs. Dws Emerging Markets |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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