Correlation Between Angel Oak and Fidelity Flex

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

Diversification Opportunities for Angel Oak and Fidelity Flex

0.87

Correlation Coefficient

Angel Oak  Fidelity Flex

Very poor diversification

The 3 months correlation between Angel and Fidelity is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Ultrashort and Fidelity Flex Servative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Flex Servative 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 Fidelity Flex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Flex Servative has no effect on the direction of Angel Oak i.e., Angel Oak and Fidelity Flex go up and down completely randomly.

Pair Corralation between Angel Oak and Fidelity Flex

Assuming the 90 days horizon Angel Oak Ultrashort is not expected to generate positive returns. However, Angel Oak Ultrashort is 1.6 times less risky than Fidelity Flex. It waists most of its returns potential to compensate for thr risk taken. Fidelity Flex is generating about 0.08 per unit of risk. If you would invest  1,000.00  in Fidelity Flex Servative on October 9, 2024 and sell it today you would earn a total of  2.00  from holding Fidelity Flex Servative or generate 0.2% return on investment over 90 days.

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

Angel Oak Ultrashort  vs.  Fidelity Flex Servative

Angel Oak Ultrashort

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Angel Oak Ultrashort are ranked lower than 5 (%) 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.

Fidelity Flex Servative

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Flex Servative are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Fidelity Flex 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 Fidelity Flex

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

The idea behind Angel Oak Ultrashort and Fidelity Flex Servative 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.