Correlation Between Angel Oak and Performance Trust
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Performance Trust 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 Performance Trust 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 Performance Trust Strategic, you can compare the effects of market volatilities on Angel Oak and Performance Trust 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 Performance Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Performance Trust.
Diversification Opportunities for Angel Oak and Performance Trust
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Angel and Performance is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Financial and Performance Trust Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Trust 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 Performance Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performance Trust has no effect on the direction of Angel Oak i.e., Angel Oak and Performance Trust go up and down completely randomly.
Pair Corralation between Angel Oak and Performance Trust
Assuming the 90 days horizon Angel Oak is expected to generate 2.13 times less return on investment than Performance Trust. But when comparing it to its historical volatility, Angel Oak Financial is 1.74 times less risky than Performance Trust. It trades about 0.11 of its potential returns per unit of risk. Performance Trust Strategic is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,969 in Performance Trust Strategic on September 1, 2024 and sell it today you would earn a total of 22.00 from holding Performance Trust Strategic or generate 1.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Angel Oak Financial vs. Performance Trust Strategic
Performance |
| Timeline |
| Angel Oak Financial |
| Performance Trust |
Angel Oak and Performance Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Performance Trust
The main advantage of trading using opposite Angel Oak and Performance Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Performance Trust 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 Performance Trust will offset losses from the drop in Performance Trust's long position.| Angel Oak vs. Vanguard Total Stock | Angel Oak vs. Vanguard 500 Index | Angel Oak vs. Vanguard Total Stock | Angel Oak vs. Vanguard Total Stock |
| Performance Trust vs. Alphacentric Income Opportunities | Performance Trust vs. Performance Trust Municipal | Performance Trust vs. Guggenheim Total Return | Performance Trust vs. Pimco Income Fund |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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