Correlation Between Angel Oak and Mfs Research
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Mfs Research 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 Mfs Research 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 Mfs Research Fund, you can compare the effects of market volatilities on Angel Oak and Mfs Research 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 Mfs Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Mfs Research.
Diversification Opportunities for Angel Oak and Mfs Research
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Angel and Mfs is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Financial and Mfs Research Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Research 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 Mfs Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Research has no effect on the direction of Angel Oak i.e., Angel Oak and Mfs Research go up and down completely randomly.
Pair Corralation between Angel Oak and Mfs Research
Assuming the 90 days horizon Angel Oak is expected to generate 7.59 times less return on investment than Mfs Research. But when comparing it to its historical volatility, Angel Oak Financial is 3.1 times less risky than Mfs Research. It trades about 0.14 of its potential returns per unit of risk. Mfs Research Fund is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 5,936 in Mfs Research Fund on September 3, 2024 and sell it today you would earn a total of 295.00 from holding Mfs Research Fund or generate 4.97% 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. Mfs Research Fund
Performance |
| Timeline |
| Angel Oak Financial |
| Mfs Research |
Angel Oak and Mfs Research Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Mfs Research
The main advantage of trading using opposite Angel Oak and Mfs Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Mfs Research 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 Mfs Research will offset losses from the drop in Mfs Research'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 |
| Mfs Research vs. California Bond Fund | Mfs Research vs. Angel Oak Financial | Mfs Research vs. Ab Bond Inflation | Mfs Research vs. Multisector Bond Sma |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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