Correlation Between Angel Oak and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Legg Mason 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 Legg Mason 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 Legg Mason Partners, you can compare the effects of market volatilities on Angel Oak and Legg Mason 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 Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Legg Mason.
Diversification Opportunities for Angel Oak and Legg Mason
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Angel and Legg is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Financial and Legg Mason Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legg Mason Partners 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 Legg Mason. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legg Mason Partners has no effect on the direction of Angel Oak i.e., Angel Oak and Legg Mason go up and down completely randomly.
Pair Corralation between Angel Oak and Legg Mason
If you would invest 1,402 in Angel Oak Financial on September 5, 2024 and sell it today you would earn a total of 9.00 from holding Angel Oak Financial or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Angel Oak Financial vs. Legg Mason Partners
Performance |
| Timeline |
| Angel Oak Financial |
| Legg Mason Partners |
Angel Oak and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Legg Mason
The main advantage of trading using opposite Angel Oak and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Legg Mason 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 Legg Mason will offset losses from the drop in Legg Mason'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 |
| Legg Mason vs. Vanguard Total Stock | Legg Mason vs. Vanguard 500 Index | Legg Mason vs. Vanguard Total Stock | Legg Mason vs. Vanguard Total Stock |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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