Correlation Between Angel Oak and Clearbridge Dividend

Can any of the company-specific risk be diversified away by investing in both Angel Oak and Clearbridge Dividend 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 Clearbridge Dividend 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 Clearbridge Dividend Strategy, you can compare the effects of market volatilities on Angel Oak and Clearbridge Dividend 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 Clearbridge Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Clearbridge Dividend.

Diversification Opportunities for Angel Oak and Clearbridge Dividend

-0.03

Correlation Coefficient

Angel Oak  Clearbridge Dividend

Good diversification

The 3 months correlation between Angel and Clearbridge is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Multi Strategy and Clearbridge Dividend Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Dividend 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 Clearbridge Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Dividend has no effect on the direction of Angel Oak i.e., Angel Oak and Clearbridge Dividend go up and down completely randomly.

Pair Corralation between Angel Oak and Clearbridge Dividend

Assuming the 90 days horizon Angel Oak Multi Strategy is expected to generate 0.25 times more return on investment than Clearbridge Dividend. However, Angel Oak Multi Strategy is 4.02 times less risky than Clearbridge Dividend. It trades about 0.14 of its potential returns per unit of risk. Clearbridge Dividend Strategy is currently generating about 0.01 per unit of risk. If you would invest  846.00  in Angel Oak Multi Strategy on December 31, 2024 and sell it today you would earn a total of  13.00  from holding Angel Oak Multi Strategy or generate 1.54% return on investment over 90 days.

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

Angel Oak Multi Strategy  vs.  Clearbridge Dividend Strategy

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 11 (%) 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.

Clearbridge Dividend

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clearbridge Dividend Strategy has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong essential indicators, Clearbridge Dividend 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 Clearbridge Dividend

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

The idea behind Angel Oak Multi Strategy and Clearbridge Dividend Strategy 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.