Correlation Between Angel Oak and Virtus ETF
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Virtus ETF 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 Virtus ETF 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 Virtus ETF Trust, you can compare the effects of market volatilities on Angel Oak and Virtus ETF 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 Virtus ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Virtus ETF.
Diversification Opportunities for Angel Oak and Virtus ETF
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Angel and Virtus is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Ultrashort and Virtus ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus ETF Trust 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 Virtus ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus ETF Trust has no effect on the direction of Angel Oak i.e., Angel Oak and Virtus ETF go up and down completely randomly.
Pair Corralation between Angel Oak and Virtus ETF
Given the investment horizon of 90 days Angel Oak is expected to generate 2.28 times less return on investment than Virtus ETF. But when comparing it to its historical volatility, Angel Oak Ultrashort is 8.54 times less risky than Virtus ETF. It trades about 0.51 of its potential returns per unit of risk. Virtus ETF Trust is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,247 in Virtus ETF Trust on August 26, 2024 and sell it today you would earn a total of 499.00 from holding Virtus ETF Trust or generate 22.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Angel Oak Ultrashort vs. Virtus ETF Trust
Performance |
| Timeline |
| Angel Oak Ultrashort |
| Virtus ETF Trust |
Angel Oak and Virtus ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Virtus ETF
The main advantage of trading using opposite Angel Oak and Virtus ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Virtus ETF 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 Virtus ETF will offset losses from the drop in Virtus ETF'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 |
| Virtus ETF vs. T Rowe Price | Virtus ETF vs. Angel Oak Ultrashort | Virtus ETF vs. T Rowe Price | Virtus ETF vs. Ab Tax Aware Short |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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