Correlation Between Angel Oak and IShares JP
Can any of the company-specific risk be diversified away by investing in both Angel Oak and IShares JP 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 Angel Oak and IShares JP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Angel Oak Ultrashort and iShares JP Morgan, you can compare the effects of market volatilities on Angel Oak and IShares JP 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 Angel Oak with a short position of IShares JP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and IShares JP.
Diversification Opportunities for Angel Oak and IShares JP
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Angel and IShares is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Ultrashort and iShares JP Morgan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares JP Morgan and Angel Oak 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 Angel Oak Ultrashort are associated (or correlated) with IShares JP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares JP Morgan has no effect on the direction of Angel Oak i.e., Angel Oak and IShares JP go up and down completely randomly.
Pair Corralation between Angel Oak and IShares JP
Given the investment horizon of 90 days Angel Oak Ultrashort is expected to generate 0.2 times more return on investment than IShares JP. However, Angel Oak Ultrashort is 5.1 times less risky than IShares JP. It trades about 0.32 of its potential returns per unit of risk. iShares JP Morgan is currently generating about -0.05 per unit of risk. If you would invest 5,102 in Angel Oak Ultrashort on August 24, 2024 and sell it today you would earn a total of 16.00 from holding Angel Oak Ultrashort or generate 0.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Angel Oak Ultrashort vs. iShares JP Morgan
Performance |
| Timeline |
| Angel Oak Ultrashort |
| iShares JP Morgan |
Angel Oak and IShares JP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and IShares JP
The main advantage of trading using opposite Angel Oak and IShares JP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, IShares JP 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 IShares JP will offset losses from the drop in IShares JP's long position.| Angel Oak vs. First Trust Low | Angel Oak vs. First Trust Senior | Angel Oak vs. First Trust TCW | Angel Oak vs. First Trust Tactical |
| IShares JP vs. iShares JP Morgan | IShares JP vs. iShares JP Morgan | IShares JP vs. iShares Intl High | IShares JP vs. iShares International High |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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