Correlation Between Angel Oak and Destra International

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

By analyzing existing cross correlation between Angel Oak Ultrashort and Destra International Event Driven, you can compare the effects of market volatilities on Angel Oak and Destra International 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 Destra International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Destra International.

Diversification Opportunities for Angel Oak and Destra International

-0.36

Correlation Coefficient

Angel Oak  Destra International

Very good diversification

The 3 months correlation between Angel and Destra is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Ultrashort and Destra International Event Dri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Destra International 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 Ultrashort are associated (or correlated) with Destra International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Destra International has no effect on the direction of Angel Oak i.e., Angel Oak and Destra International go up and down completely randomly.

Pair Corralation between Angel Oak and Destra International

Assuming the 90 days horizon Angel Oak Ultrashort is expected to generate 0.04 times more return on investment than Destra International. However, Angel Oak Ultrashort is 28.33 times less risky than Destra International. It trades about -0.1 of its potential returns per unit of risk. Destra International Event Driven is currently generating about -0.23 per unit of risk. If you would invest  983.00  in Angel Oak Ultrashort on September 29, 2024 and sell it today you would lose (1.00) from holding Angel Oak Ultrashort or give up 0.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Angel Oak Ultrashort  vs.  Destra International Event Dri

Angel Oak Ultrashort

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Angel Oak Ultrashort has generated negative risk-adjusted returns adding no value to fund investors. 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.

Destra International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Destra International Event Driven has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Angel Oak and Destra International

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

The idea behind Angel Oak Ultrashort and Destra International Event Driven 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.