Correlation Between Angel Oak and Miller Income
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Miller Income 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 Miller Income 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 Miller Income Fund, you can compare the effects of market volatilities on Angel Oak and Miller Income 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 Miller Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Miller Income.
Diversification Opportunities for Angel Oak and Miller Income
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Angel and Miller is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Financial and Miller Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miller 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 Miller Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miller Income has no effect on the direction of Angel Oak i.e., Angel Oak and Miller Income go up and down completely randomly.
Pair Corralation between Angel Oak and Miller Income
Assuming the 90 days horizon Angel Oak is expected to generate 10.06 times less return on investment than Miller Income. But when comparing it to its historical volatility, Angel Oak Financial is 5.7 times less risky than Miller Income. It trades about 0.08 of its potential returns per unit of risk. Miller Income Fund is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 754.00 in Miller Income Fund on September 5, 2024 and sell it today you would earn a total of 177.00 from holding Miller Income Fund or generate 23.47% 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. Miller Income Fund
Performance |
| Timeline |
| Angel Oak Financial |
| Miller Income |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Angel Oak and Miller Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Miller Income
The main advantage of trading using opposite Angel Oak and Miller Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Miller Income 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 Miller Income will offset losses from the drop in Miller Income'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 |
| Miller Income vs. Miller Opportunity Trust | Miller Income vs. Miller Income Fund | Miller Income vs. Miller Income Fund | Miller Income vs. Miller Income Fund |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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