Correlation Between Angel Oak and Templeton Constrained

Can any of the company-specific risk be diversified away by investing in both Angel Oak and Templeton Constrained 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 Templeton Constrained into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Angel Oak Multi Strategy and Templeton Strained Bond, you can compare the effects of market volatilities on Angel Oak and Templeton Constrained 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 Templeton Constrained. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Templeton Constrained.

Diversification Opportunities for Angel Oak and Templeton Constrained

0.88

Correlation Coefficient

Angel Oak  Templeton Constrained

Very poor diversification

The 3 months correlation between Angel and Templeton is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Multi Strategy and Templeton Strained Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Strained 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 Multi Strategy are associated (or correlated) with Templeton Constrained. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Strained Bond has no effect on the direction of Angel Oak i.e., Angel Oak and Templeton Constrained go up and down completely randomly.

Pair Corralation between Angel Oak and Templeton Constrained

Assuming the 90 days horizon Angel Oak is expected to generate 1.04 times less return on investment than Templeton Constrained. In addition to that, Angel Oak is 3.08 times more volatile than Templeton Strained Bond. It trades about 0.18 of its total potential returns per unit of risk. Templeton Strained Bond is currently generating about 0.57 per unit of volatility. If you would invest  999.00  in Templeton Strained Bond on December 29, 2024 and sell it today you would earn a total of  21.00  from holding Templeton Strained Bond or generate 2.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Angel Oak Multi Strategy  vs.  Templeton Strained Bond

Angel Oak Multi

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Angel Oak Multi Strategy are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Angel Oak is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Templeton Strained Bond

Risk-Adjusted Performance

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in Templeton Strained Bond are ranked lower than 45 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Templeton Constrained is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Angel Oak and Templeton Constrained

The main advantage of trading using opposite Angel Oak and Templeton Constrained positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Templeton Constrained 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 Templeton Constrained will offset losses from the drop in Templeton Constrained's long position.

The idea behind Angel Oak Multi Strategy and Templeton Strained Bond 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.