Correlation Between Angel Oak and Nationwide
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Nationwide 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 Nationwide 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 Nationwide E Plus, you can compare the effects of market volatilities on Angel Oak and Nationwide 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 Nationwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Nationwide.
Diversification Opportunities for Angel Oak and Nationwide
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Angel and Nationwide is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Financial and Nationwide E Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide E Plus 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 Nationwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide E Plus has no effect on the direction of Angel Oak i.e., Angel Oak and Nationwide go up and down completely randomly.
Pair Corralation between Angel Oak and Nationwide
Assuming the 90 days horizon Angel Oak is expected to generate 2.58 times less return on investment than Nationwide. But when comparing it to its historical volatility, Angel Oak Financial is 1.67 times less risky than Nationwide. It trades about 0.06 of its potential returns per unit of risk. Nationwide E Plus is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 861.00 in Nationwide E Plus on September 3, 2024 and sell it today you would earn a total of 39.00 from holding Nationwide E Plus or generate 4.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Angel Oak Financial vs. Nationwide E Plus
Performance |
| Timeline |
| Angel Oak Financial |
| Nationwide E Plus |
Angel Oak and Nationwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Nationwide
The main advantage of trading using opposite Angel Oak and Nationwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Nationwide 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 Nationwide will offset losses from the drop in Nationwide'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 |
| Nationwide vs. Angel Oak Financial | Nationwide vs. Limited Term Tax | Nationwide vs. Multisector Bond Sma | Nationwide vs. Artisan High Income |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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