Correlation Between Angel Oak and Franklin Michigan
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Franklin Michigan 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 Franklin Michigan 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 Franklin Michigan Tax Free, you can compare the effects of market volatilities on Angel Oak and Franklin Michigan 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 Franklin Michigan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Franklin Michigan.
Diversification Opportunities for Angel Oak and Franklin Michigan
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Angel and Franklin is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Financial and Franklin Michigan Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Michigan Tax 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 Franklin Michigan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Michigan Tax has no effect on the direction of Angel Oak i.e., Angel Oak and Franklin Michigan go up and down completely randomly.
Pair Corralation between Angel Oak and Franklin Michigan
Assuming the 90 days horizon Angel Oak is expected to generate 1.6 times less return on investment than Franklin Michigan. But when comparing it to its historical volatility, Angel Oak Financial is 1.33 times less risky than Franklin Michigan. It trades about 0.14 of its potential returns per unit of risk. Franklin Michigan Tax Free is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,069 in Franklin Michigan Tax Free on September 3, 2024 and sell it today you would earn a total of 11.00 from holding Franklin Michigan Tax Free or generate 1.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Angel Oak Financial vs. Franklin Michigan Tax Free
Performance |
| Timeline |
| Angel Oak Financial |
| Franklin Michigan Tax |
Angel Oak and Franklin Michigan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Franklin Michigan
The main advantage of trading using opposite Angel Oak and Franklin Michigan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Franklin Michigan 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 Franklin Michigan will offset losses from the drop in Franklin Michigan's long position.| Angel Oak vs. Omni Small Cap Value | Angel Oak vs. T Rowe Price | Angel Oak vs. Commonwealth Global Fund | Angel Oak vs. Nasdaq 100 Fund Class |
| Franklin Michigan vs. Angel Oak Financial | Franklin Michigan vs. Vanguard Financials Index | Franklin Michigan vs. Goldman Sachs Financial | Franklin Michigan vs. Gabelli Global 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 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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