Correlation Between Angel Oak and Arrow Managed
Can any of the company-specific risk be diversified away by investing in both Angel Oak and Arrow Managed 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 Arrow Managed 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 Arrow Managed Futures, you can compare the effects of market volatilities on Angel Oak and Arrow Managed 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 Arrow Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Arrow Managed.
Diversification Opportunities for Angel Oak and Arrow Managed
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Angel and Arrow is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Ultrashort and Arrow Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Managed Futures 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 Arrow Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Managed Futures has no effect on the direction of Angel Oak i.e., Angel Oak and Arrow Managed go up and down completely randomly.
Pair Corralation between Angel Oak and Arrow Managed
Assuming the 90 days horizon Angel Oak is expected to generate 6.8 times less return on investment than Arrow Managed. But when comparing it to its historical volatility, Angel Oak Ultrashort is 19.25 times less risky than Arrow Managed. It trades about 0.1 of its potential returns per unit of risk. Arrow Managed Futures is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 500.00 in Arrow Managed Futures on September 25, 2024 and sell it today you would earn a total of 3.00 from holding Arrow Managed Futures or generate 0.6% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Angel Oak Ultrashort vs. Arrow Managed Futures
Performance |
Timeline |
Angel Oak Ultrashort |
Arrow Managed Futures |
Angel Oak and Arrow Managed Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Angel Oak and Arrow Managed
The main advantage of trading using opposite Angel Oak and Arrow Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak position performs unexpectedly, Arrow Managed 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 Arrow Managed will offset losses from the drop in Arrow Managed's long position.Angel Oak vs. Health Biotchnology Portfolio | Angel Oak vs. Baillie Gifford Health | Angel Oak vs. Baron Health Care | Angel Oak vs. Fidelity Advisor Health |
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Check out your portfolio center.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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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