Correlation Between Angel Oak and Cullen High
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Cullen High 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 Cullen High 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 Cullen High Dividend, you can compare the effects of market volatilities on Angel Oak and Cullen High 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 Cullen High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Cullen High.
Diversification Opportunities for Angel Oak and Cullen High
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Angel and Cullen is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Financial and Cullen High Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullen High Dividend 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 Cullen High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullen High Dividend has no effect on the direction of Angel Oak i.e., Angel Oak and Cullen High go up and down completely randomly.
Pair Corralation between Angel Oak and Cullen High
Assuming the 90 days horizon Angel Oak is expected to generate 3.38 times less return on investment than Cullen High. But when comparing it to its historical volatility, Angel Oak Financial is 2.5 times less risky than Cullen High. It trades about 0.15 of its potential returns per unit of risk. Cullen High Dividend is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,492 in Cullen High Dividend on September 2, 2024 and sell it today you would earn a total of 36.00 from holding Cullen High Dividend or generate 2.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Angel Oak Financial vs. Cullen High Dividend
Performance |
| Timeline |
| Angel Oak Financial |
| Cullen High Dividend |
Angel Oak and Cullen High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Cullen High
The main advantage of trading using opposite Angel Oak and Cullen High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Cullen High 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 Cullen High will offset losses from the drop in Cullen High's long position.| Angel Oak vs. Vanguard Total Stock | Angel Oak vs. Vanguard 500 Index | Angel Oak vs. Vanguard Total Stock | Angel Oak vs. Vanguard Total Stock |
| Cullen High vs. Huber Capital Diversified | Cullen High vs. Pgim Conservative Retirement | Cullen High vs. Oppenheimer International Diversified | Cullen High vs. Western Asset Diversified |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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