Correlation Between Angel Oak and Aqr Small
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Aqr Small 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 Aqr Small 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 Aqr Small Cap, you can compare the effects of market volatilities on Angel Oak and Aqr Small 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 Aqr Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Aqr Small.
Diversification Opportunities for Angel Oak and Aqr Small
Poor diversification
The 3 months correlation between Angel and Aqr is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Financial and Aqr Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Small Cap 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 Aqr Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Small Cap has no effect on the direction of Angel Oak i.e., Angel Oak and Aqr Small go up and down completely randomly.
Pair Corralation between Angel Oak and Aqr Small
Assuming the 90 days horizon Angel Oak Financial is expected to under-perform the Aqr Small. But the mutual fund apears to be less risky and, when comparing its historical volatility, Angel Oak Financial is 5.31 times less risky than Aqr Small. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Aqr Small Cap is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,716 in Aqr Small Cap on September 2, 2024 and sell it today you would earn a total of 794.00 from holding Aqr Small Cap or generate 46.27% 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. Aqr Small Cap
Performance |
| Timeline |
| Angel Oak Financial |
| Aqr Small Cap |
Angel Oak and Aqr Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Aqr Small
The main advantage of trading using opposite Angel Oak and Aqr Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Aqr Small 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 Aqr Small will offset losses from the drop in Aqr Small'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 |
| Aqr Small vs. Barings Global Floating | Aqr Small vs. Blue Current Global | Aqr Small vs. Wisdomtree Siegel Global | Aqr Small vs. Ab Global Risk |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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