Correlation Between Angel Oak and Federated Pennsylvania
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Federated Pennsylvania 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 Federated Pennsylvania 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 Federated Pennsylvania Municipal, you can compare the effects of market volatilities on Angel Oak and Federated Pennsylvania 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 Federated Pennsylvania. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Federated Pennsylvania.
Diversification Opportunities for Angel Oak and Federated Pennsylvania
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Angel and FEDERATED is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Financial and Federated Pennsylvania Municip in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Pennsylvania 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 Federated Pennsylvania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Pennsylvania has no effect on the direction of Angel Oak i.e., Angel Oak and Federated Pennsylvania go up and down completely randomly.
Pair Corralation between Angel Oak and Federated Pennsylvania
Assuming the 90 days horizon Angel Oak Financial is expected to generate 0.82 times more return on investment than Federated Pennsylvania. However, Angel Oak Financial is 1.21 times less risky than Federated Pennsylvania. It trades about 0.15 of its potential returns per unit of risk. Federated Pennsylvania Municipal is currently generating about 0.06 per unit of risk. If you would invest 1,386 in Angel Oak Financial on September 3, 2024 and sell it today you would earn a total of 25.00 from holding Angel Oak Financial or generate 1.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Angel Oak Financial vs. Federated Pennsylvania Municip
Performance |
| Timeline |
| Angel Oak Financial |
| Federated Pennsylvania |
Angel Oak and Federated Pennsylvania Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Federated Pennsylvania
The main advantage of trading using opposite Angel Oak and Federated Pennsylvania positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Federated Pennsylvania 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 Federated Pennsylvania will offset losses from the drop in Federated Pennsylvania'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 |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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