Correlation Between Angel Oak and California Bond
Can any of the company-specific risk be diversified away by investing in both Angel Oak and California Bond 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 California Bond 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 California Bond Fund, you can compare the effects of market volatilities on Angel Oak and California Bond 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 California Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and California Bond.
Diversification Opportunities for Angel Oak and California Bond
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Angel and California is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Financial and California Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California 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 California Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Bond has no effect on the direction of Angel Oak i.e., Angel Oak and California Bond go up and down completely randomly.
Pair Corralation between Angel Oak and California Bond
Assuming the 90 days horizon Angel Oak Financial is expected to generate 0.63 times more return on investment than California Bond. However, Angel Oak Financial is 1.58 times less risky than California Bond. It trades about 0.08 of its potential returns per unit of risk. California Bond Fund is currently generating about 0.0 per unit of risk. If you would invest 1,401 in Angel Oak Financial on September 3, 2024 and sell it today you would earn a total of 10.00 from holding Angel Oak Financial or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Angel Oak Financial vs. California Bond Fund
Performance |
| Timeline |
| Angel Oak Financial |
| California Bond |
Angel Oak and California Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and California Bond
The main advantage of trading using opposite Angel Oak and California Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, California Bond 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 California Bond will offset losses from the drop in California Bond'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 |
| California Bond vs. Franklin California Tax Free | California Bond vs. Franklin California Tax Free | California Bond vs. Franklin California Tax Free | California Bond vs. Franklin California Tax Free |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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