Correlation Between Angel Oak and Bts Managed
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Bts Managed 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 Bts Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Angel Oak Financial and Bts Managed Income, you can compare the effects of market volatilities on Angel Oak and Bts Managed 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 Bts Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Bts Managed.
Diversification Opportunities for Angel Oak and Bts Managed
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Angel and Bts is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Financial and Bts Managed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bts Managed Income 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 Financial are associated (or correlated) with Bts Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bts Managed Income has no effect on the direction of Angel Oak i.e., Angel Oak and Bts Managed go up and down completely randomly.
Pair Corralation between Angel Oak and Bts Managed
Assuming the 90 days horizon Angel Oak is expected to generate 1.96 times less return on investment than Bts Managed. But when comparing it to its historical volatility, Angel Oak Financial is 1.18 times less risky than Bts Managed. It trades about 0.07 of its potential returns per unit of risk. Bts Managed Income is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 912.00 in Bts Managed Income on September 12, 2024 and sell it today you would earn a total of 67.00 from holding Bts Managed Income or generate 7.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Angel Oak Financial vs. Bts Managed Income
Performance |
| Timeline |
| Angel Oak Financial |
| Bts Managed Income |
Angel Oak and Bts Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Bts Managed
The main advantage of trading using opposite Angel Oak and Bts Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Bts Managed 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 Bts Managed will offset losses from the drop in Bts Managed's long position.| Angel Oak vs. Huber Capital Diversified | Angel Oak vs. Western Asset Diversified | Angel Oak vs. Sentinel Small Pany | Angel Oak vs. Blackrock Sm Cap |
| Bts Managed vs. Transamerica Financial Life | Bts Managed vs. Blackrock Financial Institutions | Bts Managed vs. Angel Oak Financial | Bts Managed vs. John Hancock Financial |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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