Correlation Between Avantis Us and Angel Oak

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Can any of the company-specific risk be diversified away by investing in both Avantis Us 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 Avantis Us and Angel Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avantis Large Cap and Angel Oak Ultrashort, you can compare the effects of market volatilities on Avantis Us 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 Avantis Us with a short position of Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avantis Us and Angel Oak.

Diversification Opportunities for Avantis Us and Angel Oak

AvantisAngelDiversified AwayAvantisAngelDiversified Away100%
0.2
  Correlation Coefficient

Modest diversification

The 3 months correlation between Avantis and Angel is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Avantis Large Cap 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 Avantis Us 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 Avantis Large Cap 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 Avantis Us i.e., Avantis Us and Angel Oak go up and down completely randomly.

Pair Corralation between Avantis Us and Angel Oak

Assuming the 90 days horizon Avantis Large Cap is expected to generate 7.84 times more return on investment than Angel Oak. However, Avantis Us is 7.84 times more volatile than Angel Oak Ultrashort. It trades about 0.11 of its potential returns per unit of risk. Angel Oak Ultrashort is currently generating about 0.2 per unit of risk. If you would invest  1,406  in Avantis Large Cap on October 25, 2024 and sell it today you would earn a total of  78.00  from holding Avantis Large Cap or generate 5.55% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Avantis Large Cap  vs.  Angel Oak Ultrashort

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -2024
JavaScript chart by amCharts 3.21.15ALCEX AOUNX
       Timeline  
Avantis Large Cap 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Avantis Large Cap are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Avantis Us is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan1414.214.414.614.81515.2
Angel Oak Ultrashort 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Angel Oak Ultrashort are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Angel Oak is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan9.79.729.749.769.789.89.82

Avantis Us and Angel Oak Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.71-2.03-1.35-0.670.00.671.372.072.783.48 51015202530
JavaScript chart by amCharts 3.21.15ALCEX AOUNX
       Returns  

Pair Trading with Avantis Us and Angel Oak

The main advantage of trading using opposite Avantis Us and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avantis Us 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.
The idea behind Avantis Large Cap and Angel Oak Ultrashort pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

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