Correlation Between Angel Oak and Destra Multi-alternativ

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

By analyzing existing cross correlation between Angel Oak Financial and Destra Multi Alternative, you can compare the effects of market volatilities on Angel Oak and Destra Multi-alternativ 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 Multi-alternativ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Destra Multi-alternativ.

Diversification Opportunities for Angel Oak and Destra Multi-alternativ

0.08

Correlation Coefficient

Angel Oak  Destra Multi-alternativ

Significant diversification

The 3 months correlation between Angel and Destra is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Financial and Destra Multi Alternative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Destra Multi Alternative 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 Financial are associated (or correlated) with Destra Multi-alternativ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Destra Multi Alternative has no effect on the direction of Angel Oak i.e., Angel Oak and Destra Multi-alternativ go up and down completely randomly.

Pair Corralation between Angel Oak and Destra Multi-alternativ

Given the investment horizon of 90 days Angel Oak is expected to generate 1.15 times less return on investment than Destra Multi-alternativ. But when comparing it to its historical volatility, Angel Oak Financial is 2.57 times less risky than Destra Multi-alternativ. It trades about 0.15 of its potential returns per unit of risk. Destra Multi Alternative is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  866.00  in Destra Multi Alternative on December 2, 2024 and sell it today you would earn a total of  14.00  from holding Destra Multi Alternative or generate 1.62% return on investment over 90 days.

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

Angel Oak Financial  vs.  Destra Multi Alternative

Angel Oak Financial

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Angel Oak Financial are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Angel Oak may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Destra Multi Alternative

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Destra Multi Alternative are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong primary indicators, Destra Multi-alternativ 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 Destra Multi-alternativ

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

The idea behind Angel Oak Financial and Destra Multi Alternative 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.

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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.