Correlation Between Angel Oak and Deutsche Enhanced
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Deutsche Enhanced 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 Deutsche Enhanced 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 Deutsche Enhanced Emerging, you can compare the effects of market volatilities on Angel Oak and Deutsche Enhanced 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 Deutsche Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Deutsche Enhanced.
Diversification Opportunities for Angel Oak and Deutsche Enhanced
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Angel and Deutsche is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Financial and Deutsche Enhanced Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Enhanced 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 Deutsche Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Enhanced has no effect on the direction of Angel Oak i.e., Angel Oak and Deutsche Enhanced go up and down completely randomly.
Pair Corralation between Angel Oak and Deutsche Enhanced
Assuming the 90 days horizon Angel Oak is expected to generate 1.37 times less return on investment than Deutsche Enhanced. But when comparing it to its historical volatility, Angel Oak Financial is 1.27 times less risky than Deutsche Enhanced. It trades about 0.15 of its potential returns per unit of risk. Deutsche Enhanced Emerging is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 725.00 in Deutsche Enhanced Emerging on September 3, 2024 and sell it today you would earn a total of 18.00 from holding Deutsche Enhanced Emerging or generate 2.48% 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. Deutsche Enhanced Emerging
Performance |
| Timeline |
| Angel Oak Financial |
| Deutsche Enhanced |
Angel Oak and Deutsche Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Deutsche Enhanced
The main advantage of trading using opposite Angel Oak and Deutsche Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Deutsche Enhanced 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 Deutsche Enhanced will offset losses from the drop in Deutsche Enhanced's long position.| Angel Oak vs. Omni Small Cap Value | Angel Oak vs. T Rowe Price | Angel Oak vs. Commonwealth Global Fund | Angel Oak vs. Nasdaq 100 Fund Class |
| Deutsche Enhanced vs. Icon Financial Fund | Deutsche Enhanced vs. Goldman Sachs Financial | Deutsche Enhanced vs. Gabelli Global Financial | Deutsche Enhanced vs. Angel Oak Financial |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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