Correlation Between Angel Oak and High Yield
Can any of the company-specific risk be diversified away by investing in both Angel Oak and High Yield 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 High Yield 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 High Yield Fund, you can compare the effects of market volatilities on Angel Oak and High Yield 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 High Yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and High Yield.
Diversification Opportunities for Angel Oak and High Yield
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Angel and High is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Financial and High Yield Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Fund 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 High Yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Fund has no effect on the direction of Angel Oak i.e., Angel Oak and High Yield go up and down completely randomly.
Pair Corralation between Angel Oak and High Yield
Assuming the 90 days horizon Angel Oak is expected to generate 2.81 times less return on investment than High Yield. But when comparing it to its historical volatility, Angel Oak Financial is 1.09 times less risky than High Yield. It trades about 0.08 of its potential returns per unit of risk. High Yield Fund is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 598.00 in High Yield Fund on September 14, 2024 and sell it today you would earn a total of 80.00 from holding High Yield Fund or generate 13.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.63% |
| Values | Daily Returns |
Angel Oak Financial vs. High Yield Fund
Performance |
| Timeline |
| Angel Oak Financial |
| High Yield Fund |
Angel Oak and High Yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and High Yield
The main advantage of trading using opposite Angel Oak and High Yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, High Yield 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 High Yield will offset losses from the drop in High Yield's long position.| Angel Oak vs. Gabelli Convertible And | Angel Oak vs. Absolute Convertible Arbitrage | Angel Oak vs. Rationalpier 88 Convertible | Angel Oak vs. Virtus Convertible |
| High Yield vs. Fidelity Advisor Financial | High Yield vs. Transamerica Financial Life | High Yield vs. Blackrock Financial Institutions | High Yield vs. Angel Oak Financial |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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