Correlation Between Angel Oak and Investment Quality
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Investment Quality 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 Investment Quality 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 Investment Quality Bond, you can compare the effects of market volatilities on Angel Oak and Investment Quality 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 Investment Quality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Investment Quality.
Diversification Opportunities for Angel Oak and Investment Quality
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Angel and Investment is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Financial and Investment Quality Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment Quality Bond 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 Investment Quality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment Quality Bond has no effect on the direction of Angel Oak i.e., Angel Oak and Investment Quality go up and down completely randomly.
Pair Corralation between Angel Oak and Investment Quality
Assuming the 90 days horizon Angel Oak Financial is expected to under-perform the Investment Quality. In addition to that, Angel Oak is 1.03 times more volatile than Investment Quality Bond. It trades about -0.05 of its total potential returns per unit of risk. Investment Quality Bond is currently generating about 0.02 per unit of volatility. If you would invest 889.00 in Investment Quality Bond on August 25, 2024 and sell it today you would earn a total of 19.00 from holding Investment Quality Bond or generate 2.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Angel Oak Financial vs. Investment Quality Bond
Performance |
| Timeline |
| Angel Oak Financial |
| Investment Quality Bond |
Angel Oak and Investment Quality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Investment Quality
The main advantage of trading using opposite Angel Oak and Investment Quality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Investment Quality 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 Investment Quality will offset losses from the drop in Investment Quality'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 |
| Investment Quality vs. Fidelity Series Government | Investment Quality vs. Dunham Porategovernment Bond | Investment Quality vs. Lord Abbett Government | Investment Quality vs. Aig Government Money |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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