Correlation Between Western Asset and Angel Oak
Can any of the company-specific risk be diversified away by investing in both Western Asset and Angel Oak 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 Western Asset and Angel Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Diversified and Angel Oak Ultrashort, you can compare the effects of market volatilities on Western Asset and Angel Oak 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 Western Asset with a short position of Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Angel Oak.
Diversification Opportunities for Western Asset and Angel Oak
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Western and Angel is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Angel Oak Ultrashort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angel Oak Ultrashort and Western Asset 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 Western Asset Diversified are associated (or correlated) with Angel Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Angel Oak Ultrashort has no effect on the direction of Western Asset i.e., Western Asset and Angel Oak go up and down completely randomly.
Pair Corralation between Western Asset and Angel Oak
Assuming the 90 days horizon Western Asset Diversified is expected to under-perform the Angel Oak. In addition to that, Western Asset is 3.37 times more volatile than Angel Oak Ultrashort. It trades about -0.03 of its total potential returns per unit of risk. Angel Oak Ultrashort is currently generating about 0.1 per unit of volatility. If you would invest 982.00 in Angel Oak Ultrashort on September 13, 2024 and sell it today you would earn a total of 3.00 from holding Angel Oak Ultrashort or generate 0.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Diversified vs. Angel Oak Ultrashort
Performance |
| Timeline |
| Western Asset Diversified |
| Angel Oak Ultrashort |
Western Asset and Angel Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Angel Oak
The main advantage of trading using opposite Western Asset and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Angel Oak 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 Angel Oak will offset losses from the drop in Angel Oak's long position.| Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard 500 Index | Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard Total Stock |
| Angel Oak vs. Angel Oak Multi Strategy | Angel Oak vs. Angel Oak Multi Strategy | Angel Oak vs. Doubleline Income Solutions | Angel Oak vs. Angel Oak Ultrashort |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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