Correlation Between Angel Oak and Prudential Jennison
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Prudential Jennison 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 Prudential Jennison 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 Prudential Jennison Mid Cap, you can compare the effects of market volatilities on Angel Oak and Prudential Jennison 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 Prudential Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Prudential Jennison.
Diversification Opportunities for Angel Oak and Prudential Jennison
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Angel and Prudential is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Financial and Prudential Jennison Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Jennison Mid 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 Prudential Jennison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Jennison Mid has no effect on the direction of Angel Oak i.e., Angel Oak and Prudential Jennison go up and down completely randomly.
Pair Corralation between Angel Oak and Prudential Jennison
Assuming the 90 days horizon Angel Oak Financial is expected to under-perform the Prudential Jennison. But the mutual fund apears to be less risky and, when comparing its historical volatility, Angel Oak Financial is 4.25 times less risky than Prudential Jennison. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Prudential Jennison Mid Cap is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,802 in Prudential Jennison Mid Cap on September 12, 2024 and sell it today you would earn a total of 688.00 from holding Prudential Jennison Mid Cap or generate 38.18% 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. Prudential Jennison Mid Cap
Performance |
| Timeline |
| Angel Oak Financial |
| Prudential Jennison Mid |
Angel Oak and Prudential Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Prudential Jennison
The main advantage of trading using opposite Angel Oak and Prudential Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Prudential Jennison 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 Prudential Jennison will offset losses from the drop in Prudential Jennison's long position.| Angel Oak vs. Huber Capital Diversified | Angel Oak vs. Western Asset Diversified | Angel Oak vs. Sentinel Small Pany | Angel Oak vs. Blackrock Sm Cap |
| Prudential Jennison vs. Fidelity Advisor Financial | Prudential Jennison vs. Angel Oak Financial | Prudential Jennison vs. Gabelli Global Financial | Prudential Jennison vs. Vanguard Financials Index |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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