Correlation Between Angel Oak and Target Retirement

Can any of the company-specific risk be diversified away by investing in both Angel Oak and Target Retirement 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 Target Retirement 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 Target Retirement 2050, you can compare the effects of market volatilities on Angel Oak and Target Retirement 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 Target Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Target Retirement.

Diversification Opportunities for Angel Oak and Target Retirement

0.0

Correlation Coefficient

Angel Oak  Target Retirement

Pay attention - limited upside

The 3 months correlation between Angel and Target is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Multi Strategy and Target Retirement 2050 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target Retirement 2050 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 Target Retirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target Retirement 2050 has no effect on the direction of Angel Oak i.e., Angel Oak and Target Retirement go up and down completely randomly.

Pair Corralation between Angel Oak and Target Retirement

Assuming the 90 days horizon Angel Oak Multi Strategy is expected to generate 0.25 times more return on investment than Target Retirement. However, Angel Oak Multi Strategy is 3.96 times less risky than Target Retirement. It trades about 0.16 of its potential returns per unit of risk. Target Retirement 2050 is currently generating about 0.04 per unit of risk. If you would invest  844.00  in Angel Oak Multi Strategy on December 20, 2024 and sell it today you would earn a total of  15.00  from holding Angel Oak Multi Strategy or generate 1.78% return on investment over 90 days.

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

Angel Oak Multi Strategy  vs.  Target Retirement 2050

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 12 (%) 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.

Target Retirement 2050

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Target Retirement 2050 are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Target Retirement 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 Target Retirement

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

The idea behind Angel Oak Multi Strategy and Target Retirement 2050 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.