Correlation Between Angel Oak and Old Westbury
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Old Westbury 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 Old Westbury 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 Old Westbury Fixed, you can compare the effects of market volatilities on Angel Oak and Old Westbury 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 Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Old Westbury.
Diversification Opportunities for Angel Oak and Old Westbury
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Angel and Old is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Financial and Old Westbury Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Fixed 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 Old Westbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Westbury Fixed has no effect on the direction of Angel Oak i.e., Angel Oak and Old Westbury go up and down completely randomly.
Pair Corralation between Angel Oak and Old Westbury
Assuming the 90 days horizon Angel Oak is expected to generate 1.69 times less return on investment than Old Westbury. But when comparing it to its historical volatility, Angel Oak Financial is 1.0 times less risky than Old Westbury. It trades about 0.08 of its potential returns per unit of risk. Old Westbury Fixed is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 999.00 in Old Westbury Fixed on November 3, 2024 and sell it today you would earn a total of 6.00 from holding Old Westbury Fixed or generate 0.6% 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. Old Westbury Fixed
Performance |
| Timeline |
| Angel Oak Financial |
| Old Westbury Fixed |
Angel Oak and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Old Westbury
The main advantage of trading using opposite Angel Oak and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Old Westbury 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 Old Westbury will offset losses from the drop in Old Westbury's long position.| Angel Oak vs. Hartford Healthcare Hls | Angel Oak vs. Baron Health Care | Angel Oak vs. Vanguard Health Care | Angel Oak vs. Blackrock Health Sciences |
| Old Westbury vs. Oppenheimer Gold Special | Old Westbury vs. Fidelity Advisor Gold | Old Westbury vs. First Eagle Gold | Old Westbury vs. James Balanced Golden |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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