Correlation Between Angel Oak and Mainstay Moderate
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Mainstay Moderate 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 Mainstay Moderate 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 Mainstay Moderate Allocation, you can compare the effects of market volatilities on Angel Oak and Mainstay Moderate 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 Mainstay Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Mainstay Moderate.
Diversification Opportunities for Angel Oak and Mainstay Moderate
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Angel and Mainstay is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Financial and Mainstay Moderate Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Moderate 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 Mainstay Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Moderate has no effect on the direction of Angel Oak i.e., Angel Oak and Mainstay Moderate go up and down completely randomly.
Pair Corralation between Angel Oak and Mainstay Moderate
Assuming the 90 days horizon Angel Oak is expected to generate 5.01 times less return on investment than Mainstay Moderate. But when comparing it to its historical volatility, Angel Oak Financial is 2.33 times less risky than Mainstay Moderate. It trades about 0.06 of its potential returns per unit of risk. Mainstay Moderate Allocation is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,369 in Mainstay Moderate Allocation on September 3, 2024 and sell it today you would earn a total of 123.00 from holding Mainstay Moderate Allocation or generate 8.98% 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. Mainstay Moderate Allocation
Performance |
| Timeline |
| Angel Oak Financial |
| Mainstay Moderate |
Angel Oak and Mainstay Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Mainstay Moderate
The main advantage of trading using opposite Angel Oak and Mainstay Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Mainstay Moderate 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 Mainstay Moderate will offset losses from the drop in Mainstay Moderate'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 |
| Mainstay Moderate vs. Calamos Dynamic Convertible | Mainstay Moderate vs. Absolute Convertible Arbitrage | Mainstay Moderate vs. Gabelli Convertible And | Mainstay Moderate vs. Lord Abbett Convertible |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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